Correlation Between Nexstar Broadcasting and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Marfrig Global 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 Marfrig Global 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 Marfrig Global Foods, you can compare the effects of market volatilities on Nexstar Broadcasting and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Marfrig Global.
Diversification Opportunities for Nexstar Broadcasting and Marfrig Global
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nexstar and Marfrig is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Marfrig Global go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and Marfrig Global
Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 2.32 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 1.49 times less risky than Marfrig Global. It trades about 0.05 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Marfrig Global Foods on September 3, 2024 and sell it today you would earn a total of 112.00 from holding Marfrig Global Foods or generate 58.03% 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. Marfrig Global Foods
Performance |
| Timeline |
| Nexstar Broadcasting |
| Marfrig Global Foods |
Nexstar Broadcasting and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Broadcasting and Marfrig Global
The main advantage of trading using opposite Nexstar Broadcasting and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global'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 |
| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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