Correlation Between Nexstar Broadcasting and LandBridge Company

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

Diversification Opportunities for Nexstar Broadcasting and LandBridge Company

0.18

Correlation Coefficient

Nexstar Broadcasting  LandBridge Company

Average diversification

The 3 months correlation between Nexstar and LandBridge is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and LandBridge Company LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandBridge Company 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 LandBridge Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandBridge Company has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and LandBridge Company go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and LandBridge Company

Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 24.57 times less return on investment than LandBridge Company. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 2.08 times less risky than LandBridge Company. It trades about 0.02 of its potential returns per unit of risk. LandBridge Company LLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,312  in LandBridge Company LLC on October 5, 2024 and sell it today you would earn a total of  4,691  from holding LandBridge Company LLC or generate 202.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	28.79%
Values	Daily Returns

Nexstar Broadcasting Group  vs.  LandBridge Company LLC

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.

LandBridge Company

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LandBridge Company LLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, LandBridge Company sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Broadcasting and LandBridge Company

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

The idea behind Nexstar Broadcasting Group and LandBridge Company LLC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.