Correlation Between Nexstar Media and Avance Gas
Can any of the company-specific risk be diversified away by investing in both Nexstar Media and Avance Gas 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 Media and Avance Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstar Media Group and Avance Gas Holding, you can compare the effects of market volatilities on Nexstar Media and Avance Gas 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 Media with a short position of Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and Avance Gas.
Diversification Opportunities for Nexstar Media and Avance Gas
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nexstar and Avance is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding and Nexstar Media 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 Media Group are associated (or correlated) with Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Nexstar Media i.e., Nexstar Media and Avance Gas go up and down completely randomly.
Pair Corralation between Nexstar Media and Avance Gas
Assuming the 90 days horizon Nexstar Media Group is expected to under-perform the Avance Gas. But the stock apears to be less risky and, when comparing its historical volatility, Nexstar Media Group is 2.37 times less risky than Avance Gas. The stock trades about -0.15 of its potential returns per unit of risk. The Avance Gas Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Avance Gas Holding on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Avance Gas Holding or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Nexstar Media Group vs. Avance Gas Holding
Performance |
| Timeline |
| Nexstar Media Group |
| Avance Gas Holding |
Nexstar Media and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Media and Avance Gas
The main advantage of trading using opposite Nexstar Media and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.| Nexstar Media vs. Micron Technology | Nexstar Media vs. MUTUIONLINE | Nexstar Media vs. ZhongAn Online P | Nexstar Media vs. Entravision Communications |
| Avance Gas vs. Vulcan Materials | Avance Gas vs. COPLAND ROAD CAPITAL | Avance Gas vs. Hyster Yale Materials Handling | Avance Gas vs. Applied Materials |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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