Correlation Between Altice USA and Beasley Broadcast
Can any of the company-specific risk be diversified away by investing in both Altice USA and Beasley Broadcast 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 Altice USA and Beasley Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altice USA and Beasley Broadcast Group, you can compare the effects of market volatilities on Altice USA and Beasley Broadcast 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 Altice USA with a short position of Beasley Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altice USA and Beasley Broadcast.
Diversification Opportunities for Altice USA and Beasley Broadcast
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Altice and Beasley is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast and Altice USA 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 Altice USA are associated (or correlated) with Beasley Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beasley Broadcast has no effect on the direction of Altice USA i.e., Altice USA and Beasley Broadcast go up and down completely randomly.
Pair Corralation between Altice USA and Beasley Broadcast
Given the investment horizon of 90 days Altice USA is expected to under-perform the Beasley Broadcast. But the stock apears to be less risky and, when comparing its historical volatility, Altice USA is 1.54 times less risky than Beasley Broadcast. The stock trades about -0.41 of its potential returns per unit of risk. The Beasley Broadcast Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Beasley Broadcast Group on January 19, 2024 and sell it today you would lose (5.00) from holding Beasley Broadcast Group or give up 6.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Altice USA vs. Beasley Broadcast Group
Performance |
Timeline |
Altice USA |
Beasley Broadcast |
Altice USA and Beasley Broadcast Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Altice USA and Beasley Broadcast
The main advantage of trading using opposite Altice USA and Beasley Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altice USA position performs unexpectedly, Beasley Broadcast 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 Beasley Broadcast will offset losses from the drop in Beasley Broadcast's long position.The idea behind Altice USA and Beasley Broadcast Group 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.Beasley Broadcast vs. Scienjoy Holding Corp | Beasley Broadcast vs. Loop Media | Beasley Broadcast vs. Curiositystream | Beasley Broadcast vs. Liberty Media |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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