Correlation Between Nexstar Media and Stora Enso

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy94.44%
ValuesDaily Returns

Nexstar Media Group  vs.  Stora Enso Oyj

 Performance 
       Timeline  
Nexstar Media Group 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Media Group are ranked lower than 3 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.
Stora Enso Oyj 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stora Enso Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.
The idea behind Nexstar Media Group and Stora Enso Oyj 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.
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.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments