Correlation Between Spanish Broadcasting and Unit

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

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

Diversification Opportunities for Spanish Broadcasting and Unit

-0.17

Correlation Coefficient

Spanish Broadcasting  Unit

Good diversification

The 3 months correlation between Spanish and Unit is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Spanish Broadcasting System and Unit Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unit and Spanish 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 Spanish Broadcasting System are associated (or correlated) with Unit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unit has no effect on the direction of Spanish Broadcasting i.e., Spanish Broadcasting and Unit go up and down completely randomly.

Pair Corralation between Spanish Broadcasting and Unit

If you would invest  3,100  in Unit Corporation on September 16, 2024 and sell it today you would earn a total of  400.00  from holding Unit Corporation or generate 12.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Spanish Broadcasting System  vs.  Unit Corp.

Spanish Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Broadcasting System has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Spanish Broadcasting is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Unit

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unit Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Unit exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spanish Broadcasting and Unit

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

The idea behind Spanish Broadcasting System and Unit Corporation 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 CEOs Directory module to screen CEOs from public companies around the world.