Correlation Between Nexstar Media and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Nexstar Media and Stora Enso 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 Stora Enso 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 Stora Enso Oyj, you can compare the effects of market volatilities on Nexstar Media and Stora Enso 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 Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and Stora Enso.
Diversification Opportunities for Nexstar Media and Stora Enso
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nexstar and Stora is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj 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 Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Nexstar Media i.e., Nexstar Media and Stora Enso go up and down completely randomly.
Pair Corralation between Nexstar Media and Stora Enso
Assuming the 90 days horizon Nexstar Media Group is expected to under-perform the Stora Enso. But the stock apears to be less risky and, when comparing its historical volatility, Nexstar Media Group is 1.3 times less risky than Stora Enso. The stock trades about -0.12 of its potential returns per unit of risk. The Stora Enso Oyj is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 979.00 in Stora Enso Oyj on October 10, 2024 and sell it today you would earn a total of 32.00 from holding Stora Enso Oyj or generate 3.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Nexstar Media Group vs. Stora Enso Oyj
Performance |
Timeline |
Nexstar Media Group |
Stora Enso Oyj |
Nexstar Media and Stora Enso Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nexstar Media and Stora Enso
The main advantage of trading using opposite Nexstar Media and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.Nexstar Media vs. Singapore Telecommunications Limited | Nexstar Media vs. INTERSHOP Communications Aktiengesellschaft | Nexstar Media vs. Zoom Video Communications | Nexstar Media vs. HEMISPHERE EGY |
Stora Enso vs. PENN Entertainment | Stora Enso vs. Nexstar Media Group | Stora Enso vs. Astral Foods Limited | Stora Enso vs. REMEDY ENTERTAINMENT OYJ |
Check out your portfolio center.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.
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