Correlation Between Sinclair Broadcast and INTERNATIONAL

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

By analyzing existing cross correlation between Sinclair Broadcast Group and INTERNATIONAL FLAVORS FRAGRANCES, you can compare the effects of market volatilities on Sinclair Broadcast and INTERNATIONAL 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 Sinclair Broadcast with a short position of INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and INTERNATIONAL.

Diversification Opportunities for Sinclair Broadcast and INTERNATIONAL

-0.19

Correlation Coefficient

Sinclair Broadcast  INTERNATIONAL

Good diversification

The 3 months correlation between Sinclair and INTERNATIONAL is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and INTERNATIONAL FLAVORS FRAGRANC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL FLAVORS and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL FLAVORS has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and INTERNATIONAL go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and INTERNATIONAL

Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 2.55 times more return on investment than INTERNATIONAL. However, Sinclair Broadcast is 2.55 times more volatile than INTERNATIONAL FLAVORS FRAGRANCES. It trades about -0.12 of its potential returns per unit of risk. INTERNATIONAL FLAVORS FRAGRANCES is currently generating about -0.33 per unit of risk. If you would invest  1,764  in Sinclair Broadcast Group on October 10, 2024 and sell it today you would lose (109.00) from holding Sinclair Broadcast Group or give up 6.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Sinclair Broadcast Group  vs.  INTERNATIONAL FLAVORS FRAGRANC

Sinclair Broadcast

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Sinclair Broadcast is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

INTERNATIONAL FLAVORS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL FLAVORS FRAGRANCES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INTERNATIONAL FLAVORS FRAGRANCES investors.

Pair Trading with Sinclair Broadcast and INTERNATIONAL

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

The idea behind Sinclair Broadcast Group and INTERNATIONAL FLAVORS FRAGRANCES 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.