Correlation Between Marchex and Clear Channel
Can any of the company-specific risk be diversified away by investing in both Marchex and Clear Channel 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 Marchex and Clear Channel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Clear Channel Outdoor, you can compare the effects of market volatilities on Marchex and Clear Channel 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 Marchex with a short position of Clear Channel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Clear Channel.
Diversification Opportunities for Marchex and Clear Channel
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marchex and Clear is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor and Marchex 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 Marchex are associated (or correlated) with Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Marchex i.e., Marchex and Clear Channel go up and down completely randomly.
Pair Corralation between Marchex and Clear Channel
Given the investment horizon of 90 days Marchex is expected to generate 2.78 times less return on investment than Clear Channel. But when comparing it to its historical volatility, Marchex is 1.17 times less risky than Clear Channel. It trades about 0.02 of its potential returns per unit of risk. Clear Channel Outdoor is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Clear Channel Outdoor on August 28, 2024 and sell it today you would earn a total of 57.00 from holding Clear Channel Outdoor or generate 55.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Clear Channel Outdoor
Performance |
| Timeline |
| Marchex |
| Clear Channel Outdoor |
Marchex and Clear Channel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Clear Channel
The main advantage of trading using opposite Marchex and Clear Channel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Clear Channel 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 Clear Channel will offset losses from the drop in Clear Channel's long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Clear Channel vs. Mirriad Advertising plc | Clear Channel vs. INEO Tech Corp | Clear Channel vs. Innovid Corp | Clear Channel vs. Townsquare Media |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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