Correlation Between Nexstar Broadcasting and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Nexstar Broadcasting and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Canlan Ice.
Diversification Opportunities for Nexstar Broadcasting and Canlan Ice
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nexstar and Canlan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Canlan Ice go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and Canlan Ice
Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 19.67 times more return on investment than Canlan Ice. However, Nexstar Broadcasting is 19.67 times more volatile than Canlan Ice Sports. It trades about 0.05 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.14 per unit of risk. If you would invest 13,331 in Nexstar Broadcasting Group on August 30, 2024 and sell it today you would earn a total of 3,784 from holding Nexstar Broadcasting Group or generate 28.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Broadcasting Group vs. Canlan Ice Sports
Performance |
| Timeline |
| Nexstar Broadcasting |
| Canlan Ice Sports |
Nexstar Broadcasting and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Broadcasting and Canlan Ice
The main advantage of trading using opposite Nexstar Broadcasting and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice'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 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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