Correlation Between Nexstar Broadcasting and Citizens
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Citizens 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 Citizens 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 Citizens, you can compare the effects of market volatilities on Nexstar Broadcasting and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Citizens.
Diversification Opportunities for Nexstar Broadcasting and Citizens
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexstar and Citizens is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Citizens go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and Citizens
Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 3.06 times less return on investment than Citizens. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 1.6 times less risky than Citizens. It trades about 0.02 of its potential returns per unit of risk. Citizens is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 301.00 in Citizens on September 12, 2024 and sell it today you would earn a total of 89.00 from holding Citizens or generate 29.57% 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. Citizens
Performance |
| Timeline |
| Nexstar Broadcasting |
| Citizens |
Nexstar Broadcasting and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Broadcasting and Citizens
The main advantage of trading using opposite Nexstar Broadcasting and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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