Correlation Between Baosheng Media and Clear Channel

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

By analyzing existing cross correlation between Baosheng Media Group and Clear Channel Outdoor, you can compare the effects of market volatilities on Baosheng Media and Clear Channel 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 Baosheng Media with a short position of Clear Channel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baosheng Media and Clear Channel.

Diversification Opportunities for Baosheng Media and Clear Channel

0.04

Correlation Coefficient

Baosheng Media  Clear Channel

Significant diversification

The 3 months correlation between Baosheng and Clear is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Baosheng Media Group and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor and Baosheng Media 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 Baosheng Media Group are associated (or correlated) with Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Baosheng Media i.e., Baosheng Media and Clear Channel go up and down completely randomly.

Pair Corralation between Baosheng Media and Clear Channel

Given the investment horizon of 90 days Baosheng Media Group is expected to under-perform the Clear Channel. In addition to that, Baosheng Media is 3.12 times more volatile than Clear Channel Outdoor. It trades about -0.1 of its total potential returns per unit of risk. Clear Channel Outdoor is currently generating about -0.11 per unit of volatility. If you would invest  162.00  in Clear Channel Outdoor on September 12, 2024 and sell it today you would lose (7.00) from holding Clear Channel Outdoor or give up 4.32% of portfolio value over 90 days.

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

Baosheng Media Group  vs.  Clear Channel Outdoor

Baosheng Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baosheng Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Clear Channel Outdoor

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Clear Channel Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Clear Channel is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Baosheng Media and Clear Channel

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

The idea behind Baosheng Media Group and Clear Channel Outdoor 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.