Correlation Between Tegna and Cumulus Media

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

By analyzing existing cross correlation between Tegna Inc and Cumulus Media Class, you can compare the effects of market volatilities on Tegna and Cumulus Media 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 Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and Cumulus Media.

Diversification Opportunities for Tegna and Cumulus Media

-0.16

Correlation Coefficient

Tegna  Cumulus Media

Good diversification

The 3 months correlation between Tegna and Cumulus is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Tegna i.e., Tegna and Cumulus Media go up and down completely randomly.

Pair Corralation between Tegna and Cumulus Media

Given the investment horizon of 90 days Tegna Inc is expected to generate 0.27 times more return on investment than Cumulus Media. However, Tegna Inc is 3.74 times less risky than Cumulus Media. It trades about 0.0 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.06 per unit of risk. If you would invest  1,821  in Tegna Inc on December 28, 2024 and sell it today you would lose (12.00) from holding Tegna Inc or give up 0.66% of portfolio value over 90 days.

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

Tegna Inc  vs.  Cumulus Media Class

Tegna Inc

Risk-Adjusted Performance

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.

Cumulus Media Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Tegna and Cumulus Media

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

The idea behind Tegna Inc and Cumulus Media Class 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..