Correlation Between Mediaco Holding and Salem Media

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

By analyzing existing cross correlation between Mediaco Holding and Salem Media Group, you can compare the effects of market volatilities on Mediaco Holding and Salem Media 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 Mediaco Holding with a short position of Salem Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediaco Holding and Salem Media.

Diversification Opportunities for Mediaco Holding and Salem Media

0.0

Correlation Coefficient

Mediaco Holding  Salem Media

Pay attention - limited upside

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

Pair Corralation between Mediaco Holding and Salem Media

If you would invest (100.00) in Salem Media Group on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Salem Media Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mediaco Holding  vs.  Salem Media Group

Mediaco Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mediaco Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Salem Media Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salem Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Salem Media is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mediaco Holding and Salem Media

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

The idea behind Mediaco Holding and Salem Media 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.