Correlation Between Nexstar Media and EnviTec Biogas
Can any of the company-specific risk be diversified away by investing in both Nexstar Media and EnviTec Biogas 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 EnviTec Biogas 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 EnviTec Biogas AG, you can compare the effects of market volatilities on Nexstar Media and EnviTec Biogas 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 EnviTec Biogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and EnviTec Biogas.
Diversification Opportunities for Nexstar Media and EnviTec Biogas
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nexstar and EnviTec is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and EnviTec Biogas AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnviTec Biogas AG 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 EnviTec Biogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnviTec Biogas AG has no effect on the direction of Nexstar Media i.e., Nexstar Media and EnviTec Biogas go up and down completely randomly.
Pair Corralation between Nexstar Media and EnviTec Biogas
Assuming the 90 days horizon Nexstar Media Group is expected to generate 1.13 times more return on investment than EnviTec Biogas. However, Nexstar Media is 1.13 times more volatile than EnviTec Biogas AG. It trades about -0.02 of its potential returns per unit of risk. EnviTec Biogas AG is currently generating about -0.04 per unit of risk. If you would invest 15,185 in Nexstar Media Group on November 3, 2024 and sell it today you would lose (170.00) from holding Nexstar Media Group or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Media Group vs. EnviTec Biogas AG
Performance |
| Timeline |
| Nexstar Media Group |
| EnviTec Biogas AG |
Nexstar Media and EnviTec Biogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Media and EnviTec Biogas
The main advantage of trading using opposite Nexstar Media and EnviTec Biogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media position performs unexpectedly, EnviTec Biogas 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 EnviTec Biogas will offset losses from the drop in EnviTec Biogas' long position.| Nexstar Media vs. MPH Health Care | Nexstar Media vs. CeoTronics AG | Nexstar Media vs. Northern Data AG | Nexstar Media vs. CARDINAL HEALTH |
| EnviTec Biogas vs. X FAB Silicon Foundries | EnviTec Biogas vs. Yanzhou Coal Mining | EnviTec Biogas vs. Mitsui Chemicals | EnviTec Biogas vs. AIR PRODCHEMICALS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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