Correlation Between Urban One and Spanish Broadcasting

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

By analyzing existing cross correlation between Urban One and Spanish Broadcasting System, you can compare the effects of market volatilities on Urban One and Spanish 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 Urban One with a short position of Spanish Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban One and Spanish Broadcasting.

Diversification Opportunities for Urban One and Spanish Broadcasting

-0.53

Correlation Coefficient

Urban One  Spanish Broadcasting

Excellent diversification

The 3 months correlation between Urban and Spanish is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Urban One and Spanish Broadcasting System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Broadcasting and Urban One 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 Urban One are associated (or correlated) with Spanish Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Broadcasting has no effect on the direction of Urban One i.e., Urban One and Spanish Broadcasting go up and down completely randomly.

Pair Corralation between Urban One and Spanish Broadcasting

If you would invest  65.00  in Spanish Broadcasting System on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Spanish Broadcasting System or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.28%
Values	Daily Returns

Urban One  vs.  Spanish Broadcasting System

Urban One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urban One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Spanish Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Urban One and Spanish Broadcasting

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

The idea behind Urban One and Spanish Broadcasting System 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.