Correlation Between Tegna and E W

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

By analyzing existing cross correlation between Tegna Inc and E W Scripps, you can compare the effects of market volatilities on Tegna and E W 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 Tegna with a short position of E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and E W.

Diversification Opportunities for Tegna and E W

0.26

Correlation Coefficient

Tegna  E W

Modest diversification

The 3 months correlation between Tegna and SSP is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps and Tegna 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 Tegna Inc are associated (or correlated) with E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Tegna i.e., Tegna and E W go up and down completely randomly.

Pair Corralation between Tegna and E W

Given the investment horizon of 90 days Tegna Inc is expected to generate 0.34 times more return on investment than E W. However, Tegna Inc is 2.92 times less risky than E W. It trades about 0.21 of its potential returns per unit of risk. E W Scripps is currently generating about -0.04 per unit of risk. If you would invest  1,622  in Tegna Inc on August 25, 2024 and sell it today you would earn a total of  249.00  from holding Tegna Inc or generate 15.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tegna Inc  vs.  E W Scripps

Tegna Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tegna Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tegna sustained solid returns over the last few months and may actually be approaching a breakup point.

E W Scripps

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in E W Scripps are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, E W reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tegna and E W

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

The idea behind Tegna Inc and E W Scripps 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.