Correlation Between Gray Television and Atlanta Braves

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

By analyzing existing cross correlation between Gray Television and Atlanta Braves Holdings, you can compare the effects of market volatilities on Gray Television and Atlanta Braves 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 Gray Television with a short position of Atlanta Braves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and Atlanta Braves.

Diversification Opportunities for Gray Television and Atlanta Braves

0.27

Correlation Coefficient

Gray Television  Atlanta Braves

Modest diversification

The 3 months correlation between Gray and Atlanta is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and Atlanta Braves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanta Braves Holdings and Gray Television 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 Gray Television are associated (or correlated) with Atlanta Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanta Braves Holdings has no effect on the direction of Gray Television i.e., Gray Television and Atlanta Braves go up and down completely randomly.

Pair Corralation between Gray Television and Atlanta Braves

Considering the 90-day investment horizon Gray Television is expected to generate 2.78 times more return on investment than Atlanta Braves. However, Gray Television is 2.78 times more volatile than Atlanta Braves Holdings. It trades about 0.02 of its potential returns per unit of risk. Atlanta Braves Holdings is currently generating about 0.02 per unit of risk. If you would invest  600.00  in Gray Television on March 2, 2024 and sell it today you would earn a total of  2.00  from holding Gray Television or generate 0.33% return on investment over 90 days.

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

Gray Television  vs.  Atlanta Braves Holdings

Gray Television

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gray Television are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Gray Television may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Atlanta Braves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Atlanta Braves is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gray Television and Atlanta Braves

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

The idea behind Gray Television and Atlanta Braves Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.