Correlation Between Nexstar Media and Golden Entertainment

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

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

Diversification Opportunities for Nexstar Media and Golden Entertainment

0.86

Correlation Coefficient

Nexstar Media  Golden Entertainment

Very poor diversification

The 3 months correlation between Nexstar and Golden is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment and Nexstar Media 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 Media Group are associated (or correlated) with Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Nexstar Media i.e., Nexstar Media and Golden Entertainment go up and down completely randomly.

Pair Corralation between Nexstar Media and Golden Entertainment

Assuming the 90 days horizon Nexstar Media Group is expected to generate 1.01 times more return on investment than Golden Entertainment. However, Nexstar Media is 1.01 times more volatile than Golden Entertainment. It trades about 0.01 of its potential returns per unit of risk. Golden Entertainment is currently generating about -0.02 per unit of risk. If you would invest  15,127  in Nexstar Media Group on April 20, 2025 and sell it today you would earn a total of  253.00  from holding Nexstar Media Group or generate 1.67% return on investment over 90 days.

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

Nexstar Media Group  vs.  Golden Entertainment

Nexstar Media Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexstar Media Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nexstar Media reported solid returns over the last few months and may actually be approaching a breakup point.

Golden Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Golden Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Media and Golden Entertainment

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

The idea behind Nexstar Media Group and Golden Entertainment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.