Correlation Between VULCAN MATERIALS and Nexstar Media

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

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

Diversification Opportunities for VULCAN MATERIALS and Nexstar Media

-0.73

Correlation Coefficient

VULCAN MATERIALS  Nexstar Media

Pay attention - limited upside

The 3 months correlation between VULCAN and Nexstar is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Nexstar Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Media Group and VULCAN MATERIALS 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 VULCAN MATERIALS are associated (or correlated) with Nexstar Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Media Group has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Nexstar Media go up and down completely randomly.

Pair Corralation between VULCAN MATERIALS and Nexstar Media

Assuming the 90 days trading horizon VULCAN MATERIALS is expected to under-perform the Nexstar Media. But the stock apears to be less risky and, when comparing its historical volatility, VULCAN MATERIALS is 1.37 times less risky than Nexstar Media. The stock trades about -0.13 of its potential returns per unit of risk. The Nexstar Media Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  15,039  in Nexstar Media Group on December 22, 2024 and sell it today you would earn a total of  876.00  from holding Nexstar Media Group or generate 5.82% return on investment over 90 days.

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

VULCAN MATERIALS  vs.  Nexstar Media Group

VULCAN MATERIALS

Risk-Adjusted Performance

Very Weak

Over the last 90 days VULCAN MATERIALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic 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.

Nexstar Media Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Nexstar Media may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VULCAN MATERIALS and Nexstar Media

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

The idea behind VULCAN MATERIALS and Nexstar Media 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.