Correlation Between Stagwell and Gray Television
Can any of the company-specific risk be diversified away by investing in both Stagwell and Gray Television 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 Stagwell and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Gray Television, you can compare the effects of market volatilities on Stagwell and Gray Television 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 Stagwell with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Gray Television.
Diversification Opportunities for Stagwell and Gray Television
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stagwell and Gray is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and Stagwell 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 Stagwell are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of Stagwell i.e., Stagwell and Gray Television go up and down completely randomly.
Pair Corralation between Stagwell and Gray Television
Given the investment horizon of 90 days Stagwell is expected to generate 1.29 times less return on investment than Gray Television. But when comparing it to its historical volatility, Stagwell is 2.64 times less risky than Gray Television. It trades about 0.09 of its potential returns per unit of risk. Gray Television is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 639.00 in Gray Television on August 27, 2024 and sell it today you would earn a total of 123.00 from holding Gray Television or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Stagwell vs. Gray Television
Performance |
| Timeline |
| Stagwell |
| Gray Television |
Stagwell and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Gray Television
The main advantage of trading using opposite Stagwell and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
| Gray Television vs. Sphere Entertainment Co | Gray Television vs. Sweetgreen | Gray Television vs. Alvotech | Gray Television vs. Tandem Diabetes Care |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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