Correlation Between Roku and Sinclair Broadcast
Can any of the company-specific risk be diversified away by investing in both Roku and Sinclair Broadcast 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 Roku and Sinclair Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Sinclair Broadcast Group, you can compare the effects of market volatilities on Roku and Sinclair Broadcast 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 Roku with a short position of Sinclair Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Sinclair Broadcast.
Diversification Opportunities for Roku and Sinclair Broadcast
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roku and Sinclair is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast and Roku 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 Roku Inc are associated (or correlated) with Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of Roku i.e., Roku and Sinclair Broadcast go up and down completely randomly.
Pair Corralation between Roku and Sinclair Broadcast
Given the investment horizon of 90 days Roku Inc is expected to under-perform the Sinclair Broadcast. In addition to that, Roku is 1.04 times more volatile than Sinclair Broadcast Group. It trades about 0.0 of its total potential returns per unit of risk. Sinclair Broadcast Group is currently generating about 0.01 per unit of volatility. If you would invest 1,490 in Sinclair Broadcast Group on November 8, 2024 and sell it today you would lose (49.00) from holding Sinclair Broadcast Group or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. Sinclair Broadcast Group
Performance |
| Timeline |
| Roku Inc |
| Sinclair Broadcast |
Roku and Sinclair Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Sinclair Broadcast
The main advantage of trading using opposite Roku and Sinclair Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Sinclair Broadcast 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 Sinclair Broadcast will offset losses from the drop in Sinclair Broadcast's long position.| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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