Correlation Between National Presto and Gray Television

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

By analyzing existing cross correlation between National Presto Industries and Gray Television, you can compare the effects of market volatilities on National Presto and Gray Television 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 National Presto with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Presto and Gray Television.

Diversification Opportunities for National Presto and Gray Television

0.78

Correlation Coefficient

National Presto  Gray Television

Poor diversification

The 3 months correlation between National and Gray is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and National Presto 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 National Presto Industries are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of National Presto i.e., National Presto and Gray Television go up and down completely randomly.

Pair Corralation between National Presto and Gray Television

Considering the 90-day investment horizon National Presto is expected to generate 3.01 times less return on investment than Gray Television. But when comparing it to its historical volatility, National Presto Industries is 2.68 times less risky than Gray Television. It trades about 0.14 of its potential returns per unit of risk. Gray Television is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  669.00  in Gray Television on May 7, 2025 and sell it today you would earn a total of  396.00  from holding Gray Television or generate 59.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

National Presto Industries  vs.  Gray Television

National Presto Indu

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in National Presto Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, National Presto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Gray Television

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gray Television are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Gray Television sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Presto and Gray Television

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

The idea behind National Presto Industries and Gray Television 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.