Correlation Between Clear Channel and GBX International

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

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

Diversification Opportunities for Clear Channel and GBX International

-0.3

Correlation Coefficient

Clear Channel  GBX International

Very good diversification

The 3 months correlation between Clear and GBX is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clear Channel Outdoor and GBX International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBX International and Clear Channel 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 Clear Channel Outdoor are associated (or correlated) with GBX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBX International has no effect on the direction of Clear Channel i.e., Clear Channel and GBX International go up and down completely randomly.

Pair Corralation between Clear Channel and GBX International

If you would invest  0.02  in GBX International Group on October 5, 2024 and sell it today you would earn a total of  0.00  from holding GBX International Group or generate 0.0% return on investment over 90 days.

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

Clear Channel Outdoor  vs.  GBX International Group

Clear Channel Outdoor

Risk-Adjusted Performance

0 of 100

Very 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 latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GBX International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GBX International Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, GBX International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clear Channel and GBX International

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

The idea behind Clear Channel Outdoor and GBX International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.