Correlation Between Clear Channel and QuinStreet

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

By analyzing existing cross correlation between Clear Channel Outdoor and QuinStreet, you can compare the effects of market volatilities on Clear Channel and QuinStreet 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 Clear Channel with a short position of QuinStreet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Channel and QuinStreet.

Diversification Opportunities for Clear Channel and QuinStreet

-0.45

Correlation Coefficient

Clear Channel  QuinStreet

Very good diversification

The 3 months correlation between Clear and QuinStreet is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Clear Channel Outdoor and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet and Clear Channel 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 Clear Channel Outdoor are associated (or correlated) with QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of Clear Channel i.e., Clear Channel and QuinStreet go up and down completely randomly.

Pair Corralation between Clear Channel and QuinStreet

Considering the 90-day investment horizon Clear Channel is expected to generate 1.07 times less return on investment than QuinStreet. In addition to that, Clear Channel is 1.5 times more volatile than QuinStreet. It trades about 0.03 of its total potential returns per unit of risk. QuinStreet is currently generating about 0.05 per unit of volatility. If you would invest  1,058  in QuinStreet on March 11, 2024 and sell it today you would earn a total of  639.00  from holding QuinStreet or generate 60.4% return on investment over 90 days.

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

Clear Channel Outdoor  vs.  QuinStreet

Clear Channel Outdoor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Channel Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

QuinStreet

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuinStreet are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, QuinStreet may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Clear Channel and QuinStreet

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

The idea behind Clear Channel Outdoor and QuinStreet 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.