Correlation Between Nexstar Media and KAUFMAN ET

Can any of the company-specific risk be diversified away by investing in both Nexstar Media and KAUFMAN ET 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 Media and KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nexstar Media Group and KAUFMAN ET BROAD, you can compare the effects of market volatilities on Nexstar Media and KAUFMAN ET 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 Media with a short position of KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and KAUFMAN ET.

Diversification Opportunities for Nexstar Media and KAUFMAN ET

0.0

Correlation Coefficient

Nexstar Media  KAUFMAN ET

Pay attention - limited upside

The 3 months correlation between Nexstar and KAUFMAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD and Nexstar Media 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 Media Group are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Nexstar Media i.e., Nexstar Media and KAUFMAN ET go up and down completely randomly.

Pair Corralation between Nexstar Media and KAUFMAN ET

Assuming the 90 days horizon Nexstar Media Group is expected to generate 1.18 times more return on investment than KAUFMAN ET. However, Nexstar Media is 1.18 times more volatile than KAUFMAN ET BROAD. It trades about -0.04 of its potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about -0.1 per unit of risk. If you would invest  15,441  in Nexstar Media Group on October 23, 2024 and sell it today you would lose (776.00) from holding Nexstar Media Group or give up 5.03% of portfolio value over 90 days.

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

Nexstar Media Group  vs.  KAUFMAN ET BROAD

Nexstar Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexstar Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nexstar Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KAUFMAN ET BROAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KAUFMAN ET BROAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Nexstar Media and KAUFMAN ET

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

The idea behind Nexstar Media Group and KAUFMAN ET BROAD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.