Correlation Between Paramount Global and Sinclair Broadcast

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

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

Diversification Opportunities for Paramount Global and Sinclair Broadcast

-0.72

Correlation Coefficient

Paramount Global  Sinclair Broadcast

Pay attention - limited upside

The 3 months correlation between Paramount and Sinclair is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast and Paramount Global 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 Paramount Global are associated (or correlated) with Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of Paramount Global i.e., Paramount Global and Sinclair Broadcast go up and down completely randomly.

Pair Corralation between Paramount Global and Sinclair Broadcast

If you would invest  2,227  in Paramount Global on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Paramount Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Paramount Global  vs.  Sinclair Broadcast Group

Paramount Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paramount Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Paramount Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sinclair Broadcast

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Sinclair Broadcast demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paramount Global and Sinclair Broadcast

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

The idea behind Paramount Global and Sinclair Broadcast 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.