Correlation Between Paiute Oil and Nexstar Broadcasting

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

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

Diversification Opportunities for Paiute Oil and Nexstar Broadcasting

0.77

Correlation Coefficient

Paiute Oil  Nexstar Broadcasting

Poor diversification

The 3 months correlation between Paiute and Nexstar is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Paiute Oil Mining and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Paiute Oil 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 Paiute Oil Mining are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Paiute Oil i.e., Paiute Oil and Nexstar Broadcasting go up and down completely randomly.

Pair Corralation between Paiute Oil and Nexstar Broadcasting

Assuming the 90 days horizon Paiute Oil Mining is expected to under-perform the Nexstar Broadcasting. In addition to that, Paiute Oil is 6.49 times more volatile than Nexstar Broadcasting Group. It trades about -0.13 of its total potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.03 per unit of volatility. If you would invest  16,834  in Nexstar Broadcasting Group on December 3, 2024 and sell it today you would earn a total of  388.00  from holding Nexstar Broadcasting Group or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.72%
Values	Daily Returns

Paiute Oil Mining  vs.  Nexstar Broadcasting Group

Paiute Oil Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paiute Oil Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Nexstar Broadcasting

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Broadcasting Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Nexstar Broadcasting is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Paiute Oil and Nexstar Broadcasting

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

The idea behind Paiute Oil Mining and Nexstar Broadcasting Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.