Correlation Between Sinclair Broadcast and Roku
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on Sinclair Broadcast and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Roku.
Diversification Opportunities for Sinclair Broadcast and Roku
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinclair and Roku is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Roku go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Roku
Given the investment horizon of 90 days Sinclair Broadcast is expected to generate 3.11 times less return on investment than Roku. In addition to that, Sinclair Broadcast is 1.03 times more volatile than Roku Inc. It trades about 0.01 of its total potential returns per unit of risk. Roku Inc is currently generating about 0.04 per unit of volatility. If you would invest 5,490 in Roku Inc on November 1, 2024 and sell it today you would earn a total of 2,768 from holding Roku Inc or generate 50.42% 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. Roku Inc
Performance |
| Timeline |
| Sinclair Broadcast |
| Roku Inc |
Sinclair Broadcast and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Roku
The main advantage of trading using opposite Sinclair Broadcast and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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