Correlation Between Beasley Broadcast and Mediaco Holding

Can any of the company-specific risk be diversified away by investing in both Beasley Broadcast and Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding, you can compare the effects of market volatilities on Beasley Broadcast and Mediaco Holding 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 Mediaco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beasley Broadcast and Mediaco Holding.

Diversification Opportunities for Beasley Broadcast and Mediaco Holding

-0.1

Correlation Coefficient

Beasley Broadcast  Mediaco Holding

Good diversification

The 3 months correlation between Beasley and Mediaco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Beasley Broadcast Group and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding 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 Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of Beasley Broadcast i.e., Beasley Broadcast and Mediaco Holding go up and down completely randomly.

Pair Corralation between Beasley Broadcast and Mediaco Holding

Given the investment horizon of 90 days Beasley Broadcast Group is expected to under-perform the Mediaco Holding. But the stock apears to be less risky and, when comparing its historical volatility, Beasley Broadcast Group is 1.09 times less risky than Mediaco Holding. The stock trades about -0.17 of its potential returns per unit of risk. The Mediaco Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Mediaco Holding on December 29, 2024 and sell it today you would lose (1.00) from holding Mediaco Holding or give up 0.89% of portfolio value over 90 days.

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

Beasley Broadcast Group  vs.  Mediaco Holding

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.

Mediaco Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mediaco Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Mediaco Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Beasley Broadcast and Mediaco Holding

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

The idea behind Beasley Broadcast Group and Mediaco Holding 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.