Correlation Between Nexstar Broadcasting and MicroStrategy Incorporated

Can any of the company-specific risk be diversified away by investing in both Nexstar Broadcasting and MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 MicroStrategy Incorporated 1000, you can compare the effects of market volatilities on Nexstar Broadcasting and MicroStrategy Incorporated 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 MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Broadcasting and MicroStrategy Incorporated.

Diversification Opportunities for Nexstar Broadcasting and MicroStrategy Incorporated

-0.32

Correlation Coefficient

Nexstar Broadcasting  MicroStrategy Incorporated

Very good diversification

The 3 months correlation between Nexstar and MicroStrategy is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Broadcasting Group and MicroStrategy Incorporated 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Nexstar Broadcasting i.e., Nexstar Broadcasting and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Nexstar Broadcasting and MicroStrategy Incorporated

Given the investment horizon of 90 days Nexstar Broadcasting Group is expected to generate 1.51 times more return on investment than MicroStrategy Incorporated. However, Nexstar Broadcasting is 1.51 times more volatile than MicroStrategy Incorporated 1000. It trades about 0.03 of its potential returns per unit of risk. MicroStrategy Incorporated 1000 is currently generating about -0.04 per unit of risk. If you would invest  19,005  in Nexstar Broadcasting Group on July 23, 2025 and sell it today you would earn a total of  423.00  from holding Nexstar Broadcasting Group or generate 2.23% return on investment over 90 days.

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

Nexstar Broadcasting Group  vs.  MicroStrategy Incorporated 100

Nexstar Broadcasting

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Broadcasting Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Nexstar Broadcasting is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

MicroStrategy Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroStrategy Incorporated 1000 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MicroStrategy Incorporated 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 MicroStrategy Incorporated

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

The idea behind Nexstar Broadcasting Group and MicroStrategy Incorporated 1000 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.