Correlation Between Sirius XM and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Sirius XM and Cumulus Media 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 Sirius XM and Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sirius XM Holding and Cumulus Media Class, you can compare the effects of market volatilities on Sirius XM and Cumulus Media 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 Sirius XM with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirius XM and Cumulus Media.
Diversification Opportunities for Sirius XM and Cumulus Media
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sirius and Cumulus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sirius XM Holding and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class and Sirius XM 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 Sirius XM Holding are associated (or correlated) with Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Sirius XM i.e., Sirius XM and Cumulus Media go up and down completely randomly.
Pair Corralation between Sirius XM and Cumulus Media
Given the investment horizon of 90 days Sirius XM Holding is expected to generate 0.81 times more return on investment than Cumulus Media. However, Sirius XM Holding is 1.23 times less risky than Cumulus Media. It trades about -0.03 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.07 per unit of risk. If you would invest 600.00 in Sirius XM Holding on January 24, 2024 and sell it today you would lose (287.00) from holding Sirius XM Holding or give up 47.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sirius XM Holding vs. Cumulus Media Class
Performance |
| Timeline |
| Sirius XM Holding |
| Cumulus Media Class |
Sirius XM and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sirius XM and Cumulus Media
The main advantage of trading using opposite Sirius XM and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirius XM position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Sirius XM vs. Liberty Global PLC | Sirius XM vs. Shenandoah Telecommunications Co | Sirius XM vs. Liberty Global PLC | Sirius XM vs. Liberty Latin America |
| Cumulus Media vs. News Corp B | Cumulus Media vs. Liberty Media | Cumulus Media vs. Marcus | Cumulus Media vs. Madison Square Garden |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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