Correlation Between Tegna and Beasley Broadcast

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

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

Diversification Opportunities for Tegna and Beasley Broadcast

0.34

Correlation Coefficient

Tegna  Beasley Broadcast

Weak diversification

The 3 months correlation between Tegna and Beasley is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast and Tegna 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 Tegna Inc are associated (or correlated) with Beasley Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beasley Broadcast has no effect on the direction of Tegna i.e., Tegna and Beasley Broadcast go up and down completely randomly.

Pair Corralation between Tegna and Beasley Broadcast

Given the investment horizon of 90 days Tegna Inc is expected to generate 0.65 times more return on investment than Beasley Broadcast. However, Tegna Inc is 1.54 times less risky than Beasley Broadcast. It trades about -0.04 of its potential returns per unit of risk. Beasley Broadcast Group is currently generating about -0.18 per unit of risk. If you would invest  1,878  in Tegna Inc on December 2, 2024 and sell it today you would lose (58.00) from holding Tegna Inc or give up 3.09% of portfolio value over 90 days.

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

Tegna Inc  vs.  Beasley Broadcast Group

Tegna Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tegna Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tegna is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Beasley Broadcast

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beasley Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Beasley Broadcast is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tegna and Beasley Broadcast

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

The idea behind Tegna Inc and Beasley Broadcast 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.