Correlation Between Nexstar Broadcasting and Proficient Auto

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

Diversification Opportunities for Nexstar Broadcasting and Proficient Auto

0.05

Correlation Coefficient

Nexstar Broadcasting  Proficient Auto

Significant diversification

The 3 months correlation between Nexstar and Proficient is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Proficient Auto go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and Proficient Auto

Given the investment horizon of 90 days Nexstar Broadcasting is expected to generate 1.66 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, Nexstar Broadcasting Group is 2.55 times less risky than Proficient Auto. It trades about 0.13 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  803.00  in Proficient Auto Logistics, on December 27, 2024 and sell it today you would earn a total of  172.00  from holding Proficient Auto Logistics, or generate 21.42% 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.  Proficient Auto Logistics,

Nexstar Broadcasting

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Broadcasting Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nexstar Broadcasting unveiled solid returns over the last few months and may actually be approaching a breakup point.

Proficient Auto Logi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Broadcasting and Proficient Auto

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

The idea behind Nexstar Broadcasting Group and Proficient Auto Logistics, 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.