Correlation Between Beasley Broadcast and Gray Television

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

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

Diversification Opportunities for Beasley Broadcast and Gray Television

-0.76

Correlation Coefficient

Beasley Broadcast  Gray Television

Pay attention - limited upside

The 3 months correlation between Beasley and Gray is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Beasley Broadcast Group and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and Beasley Broadcast 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 Beasley Broadcast Group are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of Beasley Broadcast i.e., Beasley Broadcast and Gray Television go up and down completely randomly.

Pair Corralation between Beasley Broadcast and Gray Television

Given the investment horizon of 90 days Beasley Broadcast Group is expected to under-perform the Gray Television. But the stock apears to be less risky and, when comparing its historical volatility, Beasley Broadcast Group is 1.26 times less risky than Gray Television. The stock trades about -0.17 of its potential returns per unit of risk. The Gray Television is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  291.00  in Gray Television on December 28, 2024 and sell it today you would earn a total of  130.00  from holding Gray Television or generate 44.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Beasley Broadcast Group  vs.  Gray Television

Beasley Broadcast

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beasley Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Gray Television

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gray Television are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Gray Television displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beasley Broadcast and Gray Television

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

The idea behind Beasley Broadcast Group and Gray Television 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.