Correlation Between Sinclair Broadcast and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast 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 Sinclair Broadcast and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinclair Broadcast Group and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Sinclair Broadcast 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 Sinclair Broadcast with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Nexstar Broadcasting.
Diversification Opportunities for Sinclair Broadcast and Nexstar Broadcasting
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinclair and Nexstar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Sinclair Broadcast 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 Sinclair Broadcast Group 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 Sinclair Broadcast i.e., Sinclair Broadcast and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Nexstar Broadcasting
Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 1.78 times more return on investment than Nexstar Broadcasting. However, Sinclair Broadcast is 1.78 times more volatile than Nexstar Broadcasting Group. It trades about 0.01 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.0 per unit of risk. 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Sinclair Broadcast |
| Nexstar Broadcasting |
Sinclair Broadcast and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Nexstar Broadcasting
The main advantage of trading using opposite Sinclair Broadcast and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast 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.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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