Correlation Between Saga Communications and Mediaco Holding
Can any of the company-specific risk be diversified away by investing in both Saga Communications and Mediaco Holding 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 Saga Communications and Mediaco Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Communications and Mediaco Holding, you can compare the effects of market volatilities on Saga Communications and Mediaco Holding 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 Saga Communications with a short position of Mediaco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Communications and Mediaco Holding.
Diversification Opportunities for Saga Communications and Mediaco Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saga and Mediaco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Saga Communications and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding and Saga Communications 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 Saga Communications are associated (or correlated) with Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of Saga Communications i.e., Saga Communications and Mediaco Holding go up and down completely randomly.
Pair Corralation between Saga Communications and Mediaco Holding
Considering the 90-day investment horizon Saga Communications is expected to generate 0.52 times more return on investment than Mediaco Holding. However, Saga Communications is 1.91 times less risky than Mediaco Holding. It trades about 0.23 of its potential returns per unit of risk. Mediaco Holding is currently generating about -0.09 per unit of risk. If you would invest 1,126 in Saga Communications on November 3, 2024 and sell it today you would earn a total of 116.00 from holding Saga Communications or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Saga Communications vs. Mediaco Holding
Performance |
| Timeline |
| Saga Communications |
| Mediaco Holding |
Saga Communications and Mediaco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Communications and Mediaco Holding
The main advantage of trading using opposite Saga Communications and Mediaco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Communications position performs unexpectedly, Mediaco Holding 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 Mediaco Holding will offset losses from the drop in Mediaco Holding's long position.| Saga Communications vs. iHeartMedia Class A | Saga Communications vs. Beasley Broadcast Group | Saga Communications vs. Cumulus Media Class | Saga Communications vs. Mediaco Holding |
| Mediaco Holding vs. Saga Communications | Mediaco Holding vs. ProSiebenSat1 Media AG | Mediaco Holding vs. Cumulus Media Class | Mediaco Holding vs. Beasley Broadcast Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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