Correlation Between Nexstar Media and EuropaCorp
Can any of the company-specific risk be diversified away by investing in both Nexstar Media and EuropaCorp 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 EuropaCorp 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 EuropaCorp, you can compare the effects of market volatilities on Nexstar Media and EuropaCorp 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 EuropaCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and EuropaCorp.
Diversification Opportunities for Nexstar Media and EuropaCorp
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexstar and EuropaCorp is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and EuropaCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EuropaCorp 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 EuropaCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EuropaCorp has no effect on the direction of Nexstar Media i.e., Nexstar Media and EuropaCorp go up and down completely randomly.
Pair Corralation between Nexstar Media and EuropaCorp
Assuming the 90 days horizon Nexstar Media Group is expected to generate 0.51 times more return on investment than EuropaCorp. However, Nexstar Media Group is 1.95 times less risky than EuropaCorp. It trades about 0.01 of its potential returns per unit of risk. EuropaCorp is currently generating about 0.0 per unit of risk. If you would invest 16,099 in Nexstar Media Group on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Nexstar Media Group or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Media Group vs. EuropaCorp
Performance |
| Timeline |
| Nexstar Media Group |
| EuropaCorp |
Nexstar Media and EuropaCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Media and EuropaCorp
The main advantage of trading using opposite Nexstar Media and EuropaCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media position performs unexpectedly, EuropaCorp 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 EuropaCorp will offset losses from the drop in EuropaCorp's long position.| Nexstar Media vs. Sunstone Hotel Investors | Nexstar Media vs. VIAPLAY GROUP AB | Nexstar Media vs. ARISTOCRAT LEISURE | Nexstar Media vs. HYATT HOTELS A |
| EuropaCorp vs. STMicroelectronics NV | EuropaCorp vs. AOI Electronics Co | EuropaCorp vs. Methode Electronics | EuropaCorp vs. UET United Electronic |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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