Correlation Between Cumulus Media and Clear Channel

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

By analyzing existing cross correlation between Cumulus Media Class and Clear Channel Outdoor, you can compare the effects of market volatilities on Cumulus Media and Clear Channel 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 Cumulus Media with a short position of Clear Channel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Clear Channel.

Diversification Opportunities for Cumulus Media and Clear Channel

-0.22

Correlation Coefficient

Cumulus Media  Clear Channel

Very good diversification

The 3 months correlation between Cumulus and Clear is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor and Cumulus Media 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 Cumulus Media Class are associated (or correlated) with Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Cumulus Media i.e., Cumulus Media and Clear Channel go up and down completely randomly.

Pair Corralation between Cumulus Media and Clear Channel

Given the investment horizon of 90 days Cumulus Media Class is expected to generate 2.11 times more return on investment than Clear Channel. However, Cumulus Media is 2.11 times more volatile than Clear Channel Outdoor. It trades about 0.07 of its potential returns per unit of risk. Clear Channel Outdoor is currently generating about 0.11 per unit of risk. If you would invest  12.00  in Cumulus Media Class on July 8, 2025 and sell it today you would earn a total of  2.00  from holding Cumulus Media Class or generate 16.67% return on investment over 90 days.

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

Cumulus Media Class  vs.  Clear Channel Outdoor

Cumulus Media Class

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cumulus Media Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Cumulus Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clear Channel Outdoor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Clear Channel Outdoor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Clear Channel displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cumulus Media and Clear Channel

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

The idea behind Cumulus Media Class and Clear Channel Outdoor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.