Correlation Between Manchester United and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Manchester United and Nexstar Broadcasting 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 Manchester United and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manchester United and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Manchester United and Nexstar Broadcasting 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 Manchester United with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manchester United and Nexstar Broadcasting.
Diversification Opportunities for Manchester United and Nexstar Broadcasting
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manchester and Nexstar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Manchester United and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Manchester United 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 Manchester United are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Manchester United i.e., Manchester United and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Manchester United and Nexstar Broadcasting
Given the investment horizon of 90 days Manchester United is expected to under-perform the Nexstar Broadcasting. But the stock apears to be less risky and, when comparing its historical volatility, Manchester United is 1.0 times less risky than Nexstar Broadcasting. The stock trades about -0.17 of its potential returns per unit of risk. The Nexstar Broadcasting Group is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 16,129 in Nexstar Broadcasting Group on November 8, 2024 and sell it today you would lose (744.00) from holding Nexstar Broadcasting Group or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manchester United vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Manchester United |
| Nexstar Broadcasting |
Manchester United and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manchester United and Nexstar Broadcasting
The main advantage of trading using opposite Manchester United and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manchester United position performs unexpectedly, Nexstar Broadcasting 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 Broadcasting will offset losses from the drop in Nexstar Broadcasting's long position.| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty Media |
| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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