Correlation Between Marchex and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Marchex and Cumulus 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 Marchex and Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Cumulus Media Class, you can compare the effects of market volatilities on Marchex and Cumulus 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 Marchex with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Cumulus Media.
Diversification Opportunities for Marchex and Cumulus Media
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marchex and Cumulus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Marchex i.e., Marchex and Cumulus Media go up and down completely randomly.
Pair Corralation between Marchex and Cumulus Media
Given the investment horizon of 90 days Marchex is expected to generate 0.73 times more return on investment than Cumulus Media. However, Marchex is 1.37 times less risky than Cumulus Media. It trades about 0.01 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.17 per unit of risk. If you would invest 177.00 in Marchex on September 5, 2024 and sell it today you would lose (1.00) from holding Marchex or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Cumulus Media Class
Performance |
| Timeline |
| Marchex |
| Cumulus Media Class |
Marchex and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Cumulus Media
The main advantage of trading using opposite Marchex and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Cumulus 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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