Correlation Between Tegna and ITV PLC
Can any of the company-specific risk be diversified away by investing in both Tegna and ITV PLC 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 ITV PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tegna Inc and ITV PLC ADR, you can compare the effects of market volatilities on Tegna and ITV PLC 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 ITV PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and ITV PLC.
Diversification Opportunities for Tegna and ITV PLC
Pay attention - limited upside
The 3 months correlation between Tegna and ITV is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and ITV PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV PLC ADR 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 ITV PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV PLC ADR has no effect on the direction of Tegna i.e., Tegna and ITV PLC go up and down completely randomly.
Pair Corralation between Tegna and ITV PLC
Given the investment horizon of 90 days Tegna Inc is expected to generate 1.03 times more return on investment than ITV PLC. However, Tegna is 1.03 times more volatile than ITV PLC ADR. It trades about 0.21 of its potential returns per unit of risk. ITV PLC ADR is currently generating about -0.23 per unit of risk. If you would invest 1,650 in Tegna Inc on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Tegna Inc or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tegna Inc vs. ITV PLC ADR
Performance |
| Timeline |
| Tegna Inc |
| ITV PLC ADR |
Tegna and ITV PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tegna and ITV PLC
The main advantage of trading using opposite Tegna and ITV PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna position performs unexpectedly, ITV PLC 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 ITV PLC will offset losses from the drop in ITV PLC's long position.| Tegna vs. E W Scripps | Tegna vs. Gray Television | Tegna vs. iHeartMedia Class A | Tegna vs. Cumulus Media Class |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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