Correlation Between FDG Electric and Nexstar Broadcasting

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

By analyzing existing cross correlation between FDG Electric Vehicles and Nexstar Broadcasting Group, you can compare the effects of market volatilities on FDG Electric and Nexstar Broadcasting 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 FDG Electric with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDG Electric and Nexstar Broadcasting.

Diversification Opportunities for FDG Electric and Nexstar Broadcasting

0.0

Correlation Coefficient

FDG Electric  Nexstar Broadcasting

Pay attention - limited upside

The 3 months correlation between FDG and Nexstar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FDG Electric Vehicles and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and FDG Electric 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 FDG Electric Vehicles are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of FDG Electric i.e., FDG Electric and Nexstar Broadcasting go up and down completely randomly.

Pair Corralation between FDG Electric and Nexstar Broadcasting

If you would invest  0.01  in FDG Electric Vehicles on October 5, 2024 and sell it today you would earn a total of  0.00  from holding FDG Electric Vehicles or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

FDG Electric Vehicles  vs.  Nexstar Broadcasting Group

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDG Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FDG Electric is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Nexstar Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexstar Broadcasting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nexstar Broadcasting is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FDG Electric and Nexstar Broadcasting

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

The idea behind FDG Electric Vehicles and Nexstar Broadcasting 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.