Correlation Between Cumulus Media and Flag Ship

Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Flag Ship 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 Cumulus Media and Flag Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cumulus Media Class and Flag Ship Acquisition, you can compare the effects of market volatilities on Cumulus Media and Flag Ship 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 Cumulus Media with a short position of Flag Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Flag Ship.

Diversification Opportunities for Cumulus Media and Flag Ship

-0.76

Correlation Coefficient

Cumulus Media  Flag Ship

Pay attention - limited upside

The 3 months correlation between Cumulus and Flag is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Flag Ship Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flag Ship Acquisition and Cumulus Media 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 Cumulus Media Class are associated (or correlated) with Flag Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flag Ship Acquisition has no effect on the direction of Cumulus Media i.e., Cumulus Media and Flag Ship go up and down completely randomly.

Pair Corralation between Cumulus Media and Flag Ship

Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Flag Ship. In addition to that, Cumulus Media is 10.74 times more volatile than Flag Ship Acquisition. It trades about -0.13 of its total potential returns per unit of risk. Flag Ship Acquisition is currently generating about 0.08 per unit of volatility. If you would invest  1,000.00  in Flag Ship Acquisition on September 22, 2024 and sell it today you would earn a total of  43.00  from holding Flag Ship Acquisition or generate 4.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	48.15%
Values	Daily Returns

Cumulus Media Class  vs.  Flag Ship Acquisition

Cumulus Media Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Flag Ship Acquisition

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flag Ship Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Flag Ship is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cumulus Media and Flag Ship

The main advantage of trading using opposite Cumulus Media and Flag Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Flag Ship 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 Flag Ship will offset losses from the drop in Flag Ship's long position.

The idea behind Cumulus Media Class and Flag Ship Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.