Correlation Between Nexstar Broadcasting and Yuexiu Transport

Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Nexstar Broadcasting and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and Yuexiu Transport.

Diversification Opportunities for Nexstar Broadcasting and Yuexiu Transport

0.68

Correlation Coefficient

Nexstar Broadcasting  Yuexiu Transport

Poor diversification

The 3 months correlation between Nexstar and Yuexiu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and Yuexiu Transport go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and Yuexiu Transport

Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 4.12 times more return on investment than Yuexiu Transport. However, Nexstar Broadcasting is 4.12 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.19 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.13 per unit of risk. If you would invest  15,425  in Nexstar Broadcasting Group on May 7, 2025 and sell it today you would earn a total of  3,433  from holding Nexstar Broadcasting Group or generate 22.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Nexstar Broadcasting Group  vs.  Yuexiu Transport Infrastructur

Nexstar Broadcasting

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Broadcasting Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Nexstar Broadcasting unveiled solid returns over the last few months and may actually be approaching a breakup point.

Yuexiu Transport Inf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Yuexiu Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nexstar Broadcasting and Yuexiu Transport

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

The idea behind Nexstar Broadcasting Group and Yuexiu Transport Infrastructure 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.