Correlation Between Nexstar Broadcasting and Atlanta Braves

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

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

Diversification Opportunities for Nexstar Broadcasting and Atlanta Braves

0.6

Correlation Coefficient

Nexstar Broadcasting  Atlanta Braves

Poor diversification

The 3 months correlation between Nexstar and Atlanta is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Atlanta Braves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanta Braves Holdings and Nexstar Broadcasting 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 Nexstar Broadcasting Group are associated (or correlated) with Atlanta Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanta Braves Holdings has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Atlanta Braves go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and Atlanta Braves

Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to under-perform the Atlanta Braves. In addition to that, Nexstar Broadcasting is 1.41 times more volatile than Atlanta Braves Holdings. It trades about -0.21 of its total potential returns per unit of risk. Atlanta Braves Holdings is currently generating about -0.05 per unit of volatility. If you would invest  4,172  in Atlanta Braves Holdings on January 29, 2024 and sell it today you would lose (56.00) from holding Atlanta Braves Holdings or give up 1.34% of portfolio value over 90 days.

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

Nexstar Broadcasting Group  vs.  Atlanta Braves Holdings

Nexstar Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexstar Broadcasting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Atlanta Braves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nexstar Broadcasting and Atlanta Braves

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

The idea behind Nexstar Broadcasting Group and Atlanta Braves Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.