Correlation Between Nexstar Broadcasting and Ihuman

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

Diversification Opportunities for Nexstar Broadcasting and Ihuman

0.01

Correlation Coefficient

Nexstar Broadcasting  Ihuman

Significant diversification

The 3 months correlation between Nexstar and Ihuman is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Ihuman go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and Ihuman

Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 1.03 times less return on investment than Ihuman. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 1.92 times less risky than Ihuman. It trades about 0.04 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Ihuman Inc on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Ihuman Inc or generate 0.0% return on investment over 90 days.

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

Nexstar Broadcasting Group  vs.  Ihuman Inc

Nexstar Broadcasting

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Broadcasting Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nexstar Broadcasting and Ihuman

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

The idea behind Nexstar Broadcasting Group and Ihuman Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.