Correlation Between Nexstar Media and VIVENDI UNSPONARD

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

Diversification Opportunities for Nexstar Media and VIVENDI UNSPONARD

0.74

Correlation Coefficient

Nexstar Media  VIVENDI UNSPONARD

Poor diversification

The 3 months correlation between Nexstar and VIVENDI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group and VIVENDI UNSPONARD EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVENDI UNSPONARD 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 VIVENDI UNSPONARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVENDI UNSPONARD has no effect on the direction of Nexstar Media i.e., Nexstar Media and VIVENDI UNSPONARD go up and down completely randomly.

Pair Corralation between Nexstar Media and VIVENDI UNSPONARD

Assuming the 90 days horizon Nexstar Media Group is expected to generate 1.14 times more return on investment than VIVENDI UNSPONARD. However, Nexstar Media is 1.14 times more volatile than VIVENDI UNSPONARD EO. It trades about 0.17 of its potential returns per unit of risk. VIVENDI UNSPONARD EO is currently generating about 0.18 per unit of risk. If you would invest  12,473  in Nexstar Media Group on April 20, 2025 and sell it today you would earn a total of  2,907  from holding Nexstar Media Group or generate 23.31% return on investment over 90 days.

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

Nexstar Media Group  vs.  VIVENDI UNSPONARD EO

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.

VIVENDI UNSPONARD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIVENDI UNSPONARD EO are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIVENDI UNSPONARD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexstar Media and VIVENDI UNSPONARD

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

The idea behind Nexstar Media Group and VIVENDI UNSPONARD EO 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.