Correlation Between Urban One and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Urban One and Cumulus Media 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 Urban One and Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban One Class and Cumulus Media Class, you can compare the effects of market volatilities on Urban One and Cumulus Media 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 Urban One with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban One and Cumulus Media.
Diversification Opportunities for Urban One and Cumulus Media
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Urban and Cumulus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Urban One Class and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class and Urban One 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 Urban One Class are associated (or correlated) with Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Urban One i.e., Urban One and Cumulus Media go up and down completely randomly.
Pair Corralation between Urban One and Cumulus Media
Assuming the 90 days horizon Urban One Class is expected to generate 0.7 times more return on investment than Cumulus Media. However, Urban One Class is 1.42 times less risky than Cumulus Media. It trades about -0.1 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.21 per unit of risk. If you would invest 130.00 in Urban One Class on September 2, 2024 and sell it today you would lose (28.00) from holding Urban One Class or give up 21.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban One Class vs. Cumulus Media Class
Performance |
| Timeline |
| Urban One Class |
| Cumulus Media Class |
Urban One and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban One and Cumulus Media
The main advantage of trading using opposite Urban One and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban One position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Urban One vs. Scienjoy Holding Corp | Urban One vs. Saga Communications | Urban One vs. Mediaco Holding | Urban One vs. iHeartMedia Class A |
| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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