Correlation Between Nexstar Media and ANI Pharmaceuticals

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

Diversification Opportunities for Nexstar Media and ANI Pharmaceuticals

0.48

Correlation Coefficient

Nexstar Media  ANI Pharmaceuticals

Very weak diversification

The 3 months correlation between Nexstar and ANI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals 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 ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Nexstar Media i.e., Nexstar Media and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Nexstar Media and ANI Pharmaceuticals

Assuming the 90 days horizon Nexstar Media Group is expected to under-perform the ANI Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Nexstar Media Group is 1.16 times less risky than ANI Pharmaceuticals. The stock trades about -0.17 of its potential returns per unit of risk. The ANI Pharmaceuticals is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  5,450  in ANI Pharmaceuticals on October 8, 2024 and sell it today you would lose (150.00) from holding ANI Pharmaceuticals or give up 2.75% of portfolio value over 90 days.

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

Nexstar Media Group  vs.  ANI Pharmaceuticals

Nexstar Media Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Nexstar Media is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ANI Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ANI Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nexstar Media and ANI Pharmaceuticals

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

The idea behind Nexstar Media Group and ANI Pharmaceuticals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.