Correlation Between Nexstar Broadcasting and 50249AAD5

Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and 50249AAD5 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 50249AAD5 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 LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on Nexstar Broadcasting and 50249AAD5 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 50249AAD5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and 50249AAD5.

Diversification Opportunities for Nexstar Broadcasting and 50249AAD5

0.31

Correlation Coefficient

Nexstar Broadcasting  50249AAD5

Weak diversification

The 3 months correlation between Nexstar and 50249AAD5 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAD5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and 50249AAD5 go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and 50249AAD5

Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to under-perform the 50249AAD5. In addition to that, Nexstar Broadcasting is 1.28 times more volatile than LYB INTERNATIONAL FINANCE. It trades about -0.06 of its total potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.07 per unit of volatility. If you would invest  7,771  in LYB INTERNATIONAL FINANCE on October 26, 2024 and sell it today you would earn a total of  500.00  from holding LYB INTERNATIONAL FINANCE or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Nexstar Broadcasting Group  vs.  LYB INTERNATIONAL FINANCE

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 50249AAD5 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nexstar Broadcasting and 50249AAD5

The main advantage of trading using opposite Nexstar Broadcasting and 50249AAD5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Broadcasting position performs unexpectedly, 50249AAD5 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 50249AAD5 will offset losses from the drop in 50249AAD5's long position.

The idea behind Nexstar Broadcasting Group and LYB INTERNATIONAL FINANCE 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.