Correlation Between Sinclair Broadcast and Paramount Global
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast and Paramount Global 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 Paramount Global 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 Paramount Global Class, you can compare the effects of market volatilities on Sinclair Broadcast and Paramount Global 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 Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Paramount Global.
Diversification Opportunities for Sinclair Broadcast and Paramount Global
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinclair and Paramount is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Paramount Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global Class 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 Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global Class has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Paramount Global go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Paramount Global
Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 1.19 times more return on investment than Paramount Global. However, Sinclair Broadcast is 1.19 times more volatile than Paramount Global Class. It trades about 0.03 of its potential returns per unit of risk. Paramount Global Class is currently generating about 0.01 per unit of risk. If you would invest 1,468 in Sinclair Broadcast Group on August 24, 2024 and sell it today you would earn a total of 261.00 from holding Sinclair Broadcast Group or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. Paramount Global Class
Performance |
| Timeline |
| Sinclair Broadcast |
| Paramount Global Class |
Sinclair Broadcast and Paramount Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Paramount Global
The main advantage of trading using opposite Sinclair Broadcast and Paramount Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast position performs unexpectedly, Paramount Global 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 Paramount Global will offset losses from the drop in Paramount Global's long position.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| Paramount Global vs. Thayer Ventures Acquisition | Paramount Global vs. Cepton Inc | Paramount Global vs. Inspirato |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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