Correlation Between Nexstar Broadcasting and Afya
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Afya 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 Nexstar Broadcasting and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstar Broadcasting Group and Afya, you can compare the effects of market volatilities on Nexstar Broadcasting and Afya 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 Nexstar Broadcasting with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Afya.
Diversification Opportunities for Nexstar Broadcasting and Afya
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexstar and Afya is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Nexstar Broadcasting 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 Nexstar Broadcasting Group are associated (or correlated) with Afya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afya has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Afya go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and Afya
Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 0.96 times more return on investment than Afya. However, Nexstar Broadcasting Group is 1.05 times less risky than Afya. It trades about 0.04 of its potential returns per unit of risk. Afya is currently generating about -0.04 per unit of risk. If you would invest 15,040 in Nexstar Broadcasting Group on August 25, 2024 and sell it today you would earn a total of 1,935 from holding Nexstar Broadcasting Group or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Broadcasting Group vs. Afya
Performance |
| Timeline |
| Nexstar Broadcasting |
| Afya |
Nexstar Broadcasting and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Broadcasting and Afya
The main advantage of trading using opposite Nexstar Broadcasting and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, Afya 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 Afya will offset losses from the drop in Afya's long position.| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
| Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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