Correlation Between Tegna and Gray Television
Can any of the company-specific risk be diversified away by investing in both Tegna 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 Tegna and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tegna Inc and Gray Television, you can compare the effects of market volatilities on Tegna 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 Tegna with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and Gray Television.
Diversification Opportunities for Tegna and Gray Television
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tegna and Gray is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and Tegna 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 Tegna Inc 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 Tegna i.e., Tegna and Gray Television go up and down completely randomly.
Pair Corralation between Tegna and Gray Television
Given the investment horizon of 90 days Tegna Inc is expected to generate 0.28 times more return on investment than Gray Television. However, Tegna Inc is 3.52 times less risky than Gray Television. It trades about 0.2 of its potential returns per unit of risk. Gray Television is currently generating about 0.05 per unit of risk. If you would invest 1,620 in Tegna Inc on August 24, 2024 and sell it today you would earn a total of 232.00 from holding Tegna Inc or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tegna Inc vs. Gray Television
Performance |
| Timeline |
| Tegna Inc |
| Gray Television |
Tegna and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tegna and Gray Television
The main advantage of trading using opposite Tegna and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna 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.| Tegna vs. E W Scripps | Tegna vs. Gray Television | Tegna vs. iHeartMedia Class A | Tegna vs. Cumulus Media Class |
| Gray Television vs. Haverty Furniture Companies | Gray Television vs. Liberty Global PLC | Gray Television vs. Gray Television | Gray Television vs. Greif Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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