Correlation Between BitFuFu and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both BitFuFu 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 BitFuFu and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BitFuFu Class A and Nexstar Broadcasting Group, you can compare the effects of market volatilities on BitFuFu 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 BitFuFu with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of BitFuFu and Nexstar Broadcasting.
Diversification Opportunities for BitFuFu and Nexstar Broadcasting
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BitFuFu and Nexstar is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BitFuFu Class A and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and BitFuFu 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 BitFuFu Class A 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 BitFuFu i.e., BitFuFu and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between BitFuFu and Nexstar Broadcasting
Given the investment horizon of 90 days BitFuFu Class A is expected to generate 4.13 times more return on investment than Nexstar Broadcasting. However, BitFuFu is 4.13 times more volatile than Nexstar Broadcasting Group. It trades about 0.02 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about -0.15 per unit of risk. If you would invest 526.00 in BitFuFu Class A on October 21, 2024 and sell it today you would lose (9.00) from holding BitFuFu Class A or give up 1.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BitFuFu Class A vs. Nexstar Broadcasting Group
Performance |
Timeline |
BitFuFu Class A |
Nexstar Broadcasting |
BitFuFu and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BitFuFu and Nexstar Broadcasting
The main advantage of trading using opposite BitFuFu and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BitFuFu 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.BitFuFu vs. Precision Drilling | ||
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Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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