Correlation Between Sinclair Broadcast and Vestis

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

Diversification Opportunities for Sinclair Broadcast and Vestis

0.55

Correlation Coefficient

Sinclair Broadcast  Vestis

Very weak diversification

The 3 months correlation between Sinclair and Vestis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Vestis go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and Vestis

Given the investment horizon of 90 days Sinclair Broadcast Group is expected to under-perform the Vestis. In addition to that, Sinclair Broadcast is 1.02 times more volatile than Vestis. It trades about -0.09 of its total potential returns per unit of risk. Vestis is currently generating about 0.03 per unit of volatility. If you would invest  1,627  in Vestis on October 9, 2024 and sell it today you would earn a total of  18.00  from holding Vestis or generate 1.11% return on investment over 90 days.

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

Sinclair Broadcast Group  vs.  Vestis

Sinclair Broadcast

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 2 (%) 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.

Vestis

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vestis are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Vestis may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sinclair Broadcast and Vestis

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

The idea behind Sinclair Broadcast Group and Vestis 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.