Correlation Between Nexstar Media and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Nexstar Media and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen, you can compare the effects of market volatilities on Nexstar Media and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and AmerisourceBergen.
Diversification Opportunities for Nexstar Media and AmerisourceBergen
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexstar and AmerisourceBergen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Nexstar Media i.e., Nexstar Media and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Nexstar Media and AmerisourceBergen
Assuming the 90 days horizon Nexstar Media Group is expected to under-perform the AmerisourceBergen. In addition to that, Nexstar Media is 1.45 times more volatile than AmerisourceBergen. It trades about -0.02 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.48 per unit of volatility. If you would invest 21,505 in AmerisourceBergen on November 3, 2024 and sell it today you would earn a total of 2,865 from holding AmerisourceBergen or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Media Group vs. AmerisourceBergen
Performance |
| Timeline |
| Nexstar Media Group |
| AmerisourceBergen |
Nexstar Media and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Media and AmerisourceBergen
The main advantage of trading using opposite Nexstar Media and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| Nexstar Media vs. MPH Health Care | Nexstar Media vs. CeoTronics AG | Nexstar Media vs. Northern Data AG | Nexstar Media vs. CARDINAL HEALTH |
| AmerisourceBergen vs. Siamgas And Petrochemicals | AmerisourceBergen vs. INDO RAMA SYNTHETIC | AmerisourceBergen vs. Zoom Video Communications | AmerisourceBergen vs. SILICON LABORATOR |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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