Correlation Between Nexstar Broadcasting and IQIYI
Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and IQIYI 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 Nexstar Broadcasting and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstar Broadcasting Group and iQIYI Inc, you can compare the effects of market volatilities on Nexstar Broadcasting and IQIYI 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 Nexstar Broadcasting with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and IQIYI.
Diversification Opportunities for Nexstar Broadcasting and IQIYI
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nexstar and IQIYI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Nexstar Broadcasting 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 Nexstar Broadcasting Group are associated (or correlated) with IQIYI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iQIYI Inc has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and IQIYI go up and down completely randomly.
Pair Corralation between Nexstar Broadcasting and IQIYI
Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 0.45 times more return on investment than IQIYI. However, Nexstar Broadcasting Group is 2.23 times less risky than IQIYI. It trades about -0.02 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.03 per unit of risk. If you would invest 16,588 in Nexstar Broadcasting Group on September 24, 2024 and sell it today you would lose (739.00) from holding Nexstar Broadcasting Group or give up 4.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nexstar Broadcasting Group vs. iQIYI Inc
Performance |
Timeline |
Nexstar Broadcasting |
iQIYI Inc |
Nexstar Broadcasting and IQIYI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nexstar Broadcasting and IQIYI
The main advantage of trading using opposite Nexstar Broadcasting and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, IQIYI 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 IQIYI will offset losses from the drop in IQIYI's long position.Nexstar Broadcasting vs. News Corp A | Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Paramount Global Class | Nexstar Broadcasting vs. Liberty Media |
IQIYI vs. Warner Bros Discovery | IQIYI vs. Paramount Global Class | IQIYI vs. Live Nation Entertainment | IQIYI vs. Nexstar Broadcasting Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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