Correlation Between Nexstar Broadcasting and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Liberty 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 Nexstar Broadcasting and Liberty Media 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 Liberty Media, you can compare the effects of market volatilities on Nexstar Broadcasting and Liberty 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 Nexstar Broadcasting with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Liberty Media.
Diversification Opportunities for Nexstar Broadcasting and Liberty Media
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nexstar and Liberty is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Liberty Media go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and Liberty Media
Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to under-perform the Liberty Media. In addition to that, Nexstar Broadcasting is 1.3 times more volatile than Liberty Media. It trades about -0.15 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.19 per unit of volatility. If you would invest 8,435 in Liberty Media on November 8, 2024 and sell it today you would earn a total of 363.00 from holding Liberty Media or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Broadcasting Group vs. Liberty Media
Performance |
| Timeline |
| Nexstar Broadcasting |
| Liberty Media |
Nexstar Broadcasting and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Broadcasting and Liberty Media
The main advantage of trading using opposite Nexstar Broadcasting and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, Liberty 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 Liberty Media will offset losses from the drop in Liberty Media'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 |
| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. Madison Square Garden | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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