Correlation Between Nexstar Broadcasting and IClick Interactive

Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and IClick Interactive 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 IClick Interactive 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 iClick Interactive Asia, you can compare the effects of market volatilities on Nexstar Broadcasting and IClick Interactive 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 IClick Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and IClick Interactive.

Diversification Opportunities for Nexstar Broadcasting and IClick Interactive

-0.52

Correlation Coefficient

Nexstar Broadcasting  IClick Interactive

Excellent diversification

The 3 months correlation between Nexstar and IClick is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and iClick Interactive Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iClick Interactive Asia 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 IClick Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iClick Interactive Asia has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and IClick Interactive go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and IClick Interactive

Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 74.04 times less return on investment than IClick Interactive. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 3.16 times less risky than IClick Interactive. It trades about 0.0 of its potential returns per unit of risk. iClick Interactive Asia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  436.00  in iClick Interactive Asia on October 11, 2024 and sell it today you would earn a total of  476.00  from holding iClick Interactive Asia or generate 109.17% return on investment over 90 days.

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

Nexstar Broadcasting Group  vs.  iClick Interactive Asia

Nexstar Broadcasting

Risk-Adjusted Performance

0 of 100

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.

iClick Interactive Asia

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iClick Interactive Asia are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, IClick Interactive disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Broadcasting and IClick Interactive

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

The idea behind Nexstar Broadcasting Group and iClick Interactive Asia 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.