Correlation Between Entravision Communications and Cumulus Media

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

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

Diversification Opportunities for Entravision Communications and Cumulus Media

-0.85

Correlation Coefficient

Entravision Communications  Cumulus Media

Pay attention - limited upside

The 3 months correlation between Entravision and Cumulus is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class and Entravision Communications 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 Entravision Communications are associated (or correlated) with Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Entravision Communications i.e., Entravision Communications and Cumulus Media go up and down completely randomly.

Pair Corralation between Entravision Communications and Cumulus Media

Considering the 90-day investment horizon Entravision Communications is expected to generate 0.29 times more return on investment than Cumulus Media. However, Entravision Communications is 3.42 times less risky than Cumulus Media. It trades about 0.17 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.37 per unit of risk. If you would invest  180.00  in Entravision Communications on April 25, 2025 and sell it today you would earn a total of  64.00  from holding Entravision Communications or generate 35.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	11.29%
Values	Daily Returns

Entravision Communications  vs.  Cumulus Media Class

Entravision Communications

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Entravision Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cumulus Media Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Entravision Communications and Cumulus Media

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

The idea behind Entravision Communications and Cumulus Media Class 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.