Correlation Between Lion One and Nexstar Broadcasting

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Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Nexstar Broadcasting.

Diversification Opportunities for Lion One and Nexstar Broadcasting

LionNexstarDiversified AwayLionNexstarDiversified Away100%
0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Lion and Nexstar is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Lion 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 Lion One Metals 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 Lion One i.e., Lion One and Nexstar Broadcasting go up and down completely randomly.

Pair Corralation between Lion One and Nexstar Broadcasting

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Nexstar Broadcasting. In addition to that, Lion One is 1.45 times more volatile than Nexstar Broadcasting Group. It trades about -0.11 of its total potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about -0.01 per unit of volatility. If you would invest  16,730  in Nexstar Broadcasting Group on September 17, 2024 and sell it today you would lose (355.00) from holding Nexstar Broadcasting Group or give up 2.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Lion One Metals  vs.  Nexstar Broadcasting Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -1001020
JavaScript chart by amCharts 3.21.15LOMLF NXST
       Timeline  
Lion One Metals 

Risk-Adjusted Performance

0 of 100

 
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Very Weak
Over the last 90 days Lion One Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.180.20.220.240.260.28
Nexstar Broadcasting 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec160165170175180185190

Lion One and Nexstar Broadcasting Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.1-3.82-2.54-1.260.02011.212.413.624.82 0.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15LOMLF NXST
       Returns  

Pair Trading with Lion One and Nexstar Broadcasting

The main advantage of trading using opposite Lion One and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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 Lion One Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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