Correlation Between NBCUNIVERSAL and Turning Point

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

By analyzing existing cross correlation between NBCUNIVERSAL MEDIA LLC and Turning Point Brands, you can compare the effects of market volatilities on NBCUNIVERSAL and Turning Point 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 NBCUNIVERSAL with a short position of Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBCUNIVERSAL and Turning Point.

Diversification Opportunities for NBCUNIVERSAL and Turning Point

-0.68

Correlation Coefficient

NBCUNIVERSAL  Turning Point

Excellent diversification

The 3 months correlation between NBCUNIVERSAL and Turning is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NBCUNIVERSAL MEDIA LLC and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands and NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC are associated (or correlated) with Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of NBCUNIVERSAL i.e., NBCUNIVERSAL and Turning Point go up and down completely randomly.

Pair Corralation between NBCUNIVERSAL and Turning Point

Assuming the 90 days trading horizon NBCUNIVERSAL MEDIA LLC is expected to under-perform the Turning Point. But the bond apears to be less risky and, when comparing its historical volatility, NBCUNIVERSAL MEDIA LLC is 1.82 times less risky than Turning Point. The bond trades about -0.07 of its potential returns per unit of risk. The Turning Point Brands is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,618  in Turning Point Brands on September 20, 2024 and sell it today you would earn a total of  3,301  from holding Turning Point Brands or generate 126.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	79.44%
Values	Daily Returns

NBCUNIVERSAL MEDIA LLC  vs.  Turning Point Brands

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NBCUNIVERSAL MEDIA LLC investors.

Turning Point Brands

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NBCUNIVERSAL and Turning Point

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

The idea behind NBCUNIVERSAL MEDIA LLC and Turning Point Brands 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..