Correlation Between Old Republic and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Old Republic and Nexstar Broadcasting 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 Old Republic and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Old Republic and Nexstar Broadcasting 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 Old Republic with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Nexstar Broadcasting.
Diversification Opportunities for Old Republic and Nexstar Broadcasting
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Old and Nexstar is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Old Republic 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 Old Republic International are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Old Republic i.e., Old Republic and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Old Republic and Nexstar Broadcasting
Considering the 90-day investment horizon Old Republic International is expected to generate 0.5 times more return on investment than Nexstar Broadcasting. However, Old Republic International is 2.01 times less risky than Nexstar Broadcasting. It trades about 0.09 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.02 per unit of risk. If you would invest 2,591 in Old Republic International on September 12, 2024 and sell it today you would earn a total of 1,039 from holding Old Republic International or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Old Republic Interna |
| Nexstar Broadcasting |
Old Republic and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Nexstar Broadcasting
The main advantage of trading using opposite Old Republic and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, Nexstar Broadcasting 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 Nexstar Broadcasting will offset losses from the drop in Nexstar Broadcasting's long position.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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