Correlation Between Nexstar Broadcasting and First Republic

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

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

Diversification Opportunities for Nexstar Broadcasting and First Republic

0.0

Correlation Coefficient

Nexstar Broadcasting  First Republic

Pay attention - limited upside

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

Pair Corralation between Nexstar Broadcasting and First Republic

If you would invest  17,106  in Nexstar Broadcasting Group on December 2, 2024 and sell it today you would lose (191.00) from holding Nexstar Broadcasting Group or give up 1.12% of portfolio value over 90 days.

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

Nexstar Broadcasting Group  vs.  First Republic Bank

Nexstar Broadcasting

Risk-Adjusted Performance

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.

First Republic Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Republic Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, First Republic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nexstar Broadcasting and First Republic

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

The idea behind Nexstar Broadcasting Group and First Republic Bank 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.