Correlation Between Software Acquisition and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Software Acquisition and Nexstar Broadcasting 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 Software Acquisition and Nexstar Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Software Acquisition Group and Nexstar Broadcasting Group, you can compare the effects of market volatilities on Software Acquisition and Nexstar Broadcasting 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 Software Acquisition with a short position of Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Acquisition and Nexstar Broadcasting.
Diversification Opportunities for Software Acquisition and Nexstar Broadcasting
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Software and Nexstar is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting and Software Acquisition 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 Software Acquisition Group are associated (or correlated) with Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Software Acquisition i.e., Software Acquisition and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Software Acquisition and Nexstar Broadcasting
Assuming the 90 days horizon Software Acquisition Group is expected to generate 15.56 times more return on investment than Nexstar Broadcasting. However, Software Acquisition is 15.56 times more volatile than Nexstar Broadcasting Group. It trades about 0.26 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.19 per unit of risk. If you would invest 2.38 in Software Acquisition Group on June 13, 2025 and sell it today you would earn a total of 7.12 from holding Software Acquisition Group or generate 299.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.1% |
| Values | Daily Returns |
Software Acquisition Group vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Software Acquisition |
| Nexstar Broadcasting |
Software Acquisition and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Software Acquisition and Nexstar Broadcasting
The main advantage of trading using opposite Software Acquisition and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition position performs unexpectedly, Nexstar Broadcasting 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 Nexstar Broadcasting will offset losses from the drop in Nexstar Broadcasting's long position.| Software Acquisition vs. Strategic Education | Software Acquisition vs. The Coca Cola | Software Acquisition vs. Afya | Software Acquisition vs. Gannett Co |
| Nexstar Broadcasting vs. Sinclair Broadcast Group | Nexstar Broadcasting vs. News Corp A | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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