Correlation Between Nexstar Broadcasting and Ziff Davis

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

Diversification Opportunities for Nexstar Broadcasting and Ziff Davis

-0.22

Correlation Coefficient

Nexstar Broadcasting  Ziff Davis

Very good diversification

The 3 months correlation between Nexstar and Ziff is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Ziff Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziff Davis 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 Ziff Davis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziff Davis has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Ziff Davis go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and Ziff Davis

Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 0.76 times more return on investment than Ziff Davis. However, Nexstar Broadcasting Group is 1.31 times less risky than Ziff Davis. It trades about 0.01 of its potential returns per unit of risk. Ziff Davis is currently generating about 0.0 per unit of risk. If you would invest  14,881  in Nexstar Broadcasting Group on October 13, 2024 and sell it today you would earn a total of  162.00  from holding Nexstar Broadcasting Group or generate 1.09% return on investment over 90 days.

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

Nexstar Broadcasting Group  vs.  Ziff Davis

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.

Ziff Davis

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ziff Davis are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Ziff Davis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Broadcasting and Ziff Davis

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

The idea behind Nexstar Broadcasting Group and Ziff Davis 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.