Correlation Between GBS Software and Nexstar Media
Can any of the company-specific risk be diversified away by investing in both GBS Software and Nexstar Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GBS Software and Nexstar Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Nexstar Media Group, you can compare the effects of market volatilities on GBS Software and Nexstar Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GBS Software with a short position of Nexstar Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Nexstar Media.
Diversification Opportunities for GBS Software and Nexstar Media
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GBS and Nexstar is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Nexstar Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Media Group and GBS Software is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GBS Software AG are associated (or correlated) with Nexstar Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Media Group has no effect on the direction of GBS Software i.e., GBS Software and Nexstar Media go up and down completely randomly.
Pair Corralation between GBS Software and Nexstar Media
Assuming the 90 days trading horizon GBS Software AG is expected to generate 1.47 times more return on investment than Nexstar Media. However, GBS Software is 1.47 times more volatile than Nexstar Media Group. It trades about 0.0 of its potential returns per unit of risk. Nexstar Media Group is currently generating about -0.08 per unit of risk. If you would invest 280.00 in GBS Software AG on November 5, 2024 and sell it today you would lose (2.00) from holding GBS Software AG or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Nexstar Media Group
Performance |
| Timeline |
| GBS Software AG |
| Nexstar Media Group |
GBS Software and Nexstar Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Nexstar Media
The main advantage of trading using opposite GBS Software and Nexstar Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, Nexstar Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nexstar Media will offset losses from the drop in Nexstar Media's long position.| GBS Software vs. SYSTEMAIR AB | GBS Software vs. LAir Liquide SA | GBS Software vs. AIR LIQUIDE ADR | GBS Software vs. Delta Air Lines |
| Nexstar Media vs. AUST AGRICULTURAL | Nexstar Media vs. AGRICULTBK HADR25 YC | Nexstar Media vs. Sumitomo Mitsui Construction | Nexstar Media vs. OPKO HEALTH |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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