Correlation Between Sinclair Broadcast and Progressive Corp

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

By analyzing existing cross correlation between Sinclair Broadcast Group and Progressive Corp, you can compare the effects of market volatilities on Sinclair Broadcast and Progressive Corp 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 Sinclair Broadcast with a short position of Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Progressive Corp.

Diversification Opportunities for Sinclair Broadcast and Progressive Corp

-0.85

Correlation Coefficient

Sinclair Broadcast  Progressive Corp

Pay attention - limited upside

The 3 months correlation between Sinclair and Progressive is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Progressive Corp go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and Progressive Corp

Given the investment horizon of 90 days Sinclair Broadcast is expected to generate 1.2 times less return on investment than Progressive Corp. In addition to that, Sinclair Broadcast is 3.87 times more volatile than Progressive Corp. It trades about 0.05 of its total potential returns per unit of risk. Progressive Corp is currently generating about 0.23 per unit of volatility. If you would invest  13,988  in Progressive Corp on January 24, 2024 and sell it today you would earn a total of  7,312  from holding Progressive Corp or generate 52.27% return on investment over 90 days.

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

Sinclair Broadcast Group  vs.  Progressive Corp

Sinclair Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinclair Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Progressive Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, Progressive Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sinclair Broadcast and Progressive Corp

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

The idea behind Sinclair Broadcast Group and Progressive Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.