Correlation Between Sirius XM and Beasley Broadcast
Can any of the company-specific risk be diversified away by investing in both Sirius XM 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 Sirius XM and Beasley Broadcast 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 Beasley Broadcast Group, you can compare the effects of market volatilities on Sirius XM 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 Sirius XM with a short position of Beasley Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirius XM and Beasley Broadcast.
Diversification Opportunities for Sirius XM and Beasley Broadcast
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sirius and Beasley is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sirius XM Holding and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast 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 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 Sirius XM i.e., Sirius XM and Beasley Broadcast go up and down completely randomly.
Pair Corralation between Sirius XM and Beasley Broadcast
Given the investment horizon of 90 days Sirius XM Holding is expected to under-perform the Beasley Broadcast. But the stock apears to be less risky and, when comparing its historical volatility, Sirius XM Holding is 1.23 times less risky than Beasley Broadcast. The stock trades about -0.19 of its potential returns per unit of risk. The Beasley Broadcast Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Beasley Broadcast Group on February 4, 2024 and sell it today you would lose (2.00) from holding Beasley Broadcast Group or give up 2.67% 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. Beasley Broadcast Group
Performance |
Timeline |
Sirius XM Holding |
Beasley Broadcast |
Sirius XM and Beasley Broadcast Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sirius XM and Beasley Broadcast
The main advantage of trading using opposite Sirius XM and Beasley Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirius XM 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.Sirius XM vs. Liberty Global PLC | Sirius XM vs. Shenandoah Telecommunications Co | Sirius XM vs. Liberty Global PLC | Sirius XM vs. Liberty Latin America |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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