Correlation Between Marchex and Clear Channel

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

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

Diversification Opportunities for Marchex and Clear Channel

0.34

Correlation Coefficient

Marchex  Clear Channel

Weak diversification

The 3 months correlation between Marchex and Clear is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor and Marchex 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 Marchex are associated (or correlated) with Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Marchex i.e., Marchex and Clear Channel go up and down completely randomly.

Pair Corralation between Marchex and Clear Channel

Given the investment horizon of 90 days Marchex is expected to generate 0.97 times more return on investment than Clear Channel. However, Marchex is 1.03 times less risky than Clear Channel. It trades about -0.03 of its potential returns per unit of risk. Clear Channel Outdoor is currently generating about -0.1 per unit of risk. If you would invest  181.00  in Marchex on December 28, 2024 and sell it today you would lose (12.00) from holding Marchex or give up 6.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Marchex  vs.  Clear Channel Outdoor

Marchex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Marchex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Clear Channel Outdoor

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Marchex and Clear Channel

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

The idea behind Marchex and Clear Channel Outdoor 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.