Correlation Between Ihuman and Nexstar Broadcasting

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

By analyzing existing cross correlation between Ihuman Inc and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Ihuman and Nexstar Broadcasting 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 Ihuman with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Nexstar Broadcasting.

Diversification Opportunities for Ihuman and Nexstar Broadcasting

-0.18

Correlation Coefficient

Ihuman  Nexstar Broadcasting

Good diversification

The 3 months correlation between Ihuman and Nexstar is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Ihuman 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 Ihuman Inc are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Ihuman i.e., Ihuman and Nexstar Broadcasting go up and down completely randomly.

Pair Corralation between Ihuman and Nexstar Broadcasting

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 1.89 times more return on investment than Nexstar Broadcasting. However, Ihuman is 1.89 times more volatile than Nexstar Broadcasting Group. It trades about 0.08 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.0 per unit of risk. If you would invest  157.00  in Ihuman Inc on September 18, 2024 and sell it today you would earn a total of  24.00  from holding Ihuman Inc or generate 15.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ihuman Inc  vs.  Nexstar Broadcasting Group

Ihuman Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Nexstar Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexstar Broadcasting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nexstar Broadcasting is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ihuman and Nexstar Broadcasting

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

The idea behind Ihuman Inc and Nexstar Broadcasting Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.