Correlation Between Mediaco Holding and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Mediaco Holding 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 Mediaco Holding and Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mediaco Holding and Cumulus Media Class, you can compare the effects of market volatilities on Mediaco Holding 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 Mediaco Holding with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediaco Holding and Cumulus Media.
Diversification Opportunities for Mediaco Holding and Cumulus Media
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mediaco and Cumulus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding i.e., Mediaco Holding and Cumulus Media go up and down completely randomly.
Pair Corralation between Mediaco Holding and Cumulus Media
Given the investment horizon of 90 days Mediaco Holding is expected to generate 2.2 times more return on investment than Cumulus Media. However, Mediaco Holding is 2.2 times more volatile than Cumulus Media Class. It trades about -0.12 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.29 per unit of risk. If you would invest 351.00 in Mediaco Holding on August 28, 2024 and sell it today you would lose (219.00) from holding Mediaco Holding or give up 62.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mediaco Holding vs. Cumulus Media Class
Performance |
| Timeline |
| Mediaco Holding |
| Cumulus Media Class |
Mediaco Holding and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mediaco Holding and Cumulus Media
The main advantage of trading using opposite Mediaco Holding and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediaco Holding 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.| Mediaco Holding vs. ADTRAN Inc | Mediaco Holding vs. Belden Inc | Mediaco Holding vs. ADC Therapeutics SA | Mediaco Holding vs. Comtech Telecommunications Corp |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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