Correlation Between E W and Loop Media

Can any of the company-specific risk be diversified away by investing in both E W and Loop Media 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 E W and Loop Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E W Scripps and Loop Media, you can compare the effects of market volatilities on E W and Loop Media 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 E W with a short position of Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of E W and Loop Media.

Diversification Opportunities for E W and Loop Media

0.6

Correlation Coefficient

E W  Loop Media

Poor diversification

The 3 months correlation between SSP and Loop is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding E W Scripps and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media and E W 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 E W Scripps are associated (or correlated) with Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of E W i.e., E W and Loop Media go up and down completely randomly.

Pair Corralation between E W and Loop Media

Considering the 90-day investment horizon E W Scripps is expected to generate 0.58 times more return on investment than Loop Media. However, E W Scripps is 1.72 times less risky than Loop Media. It trades about -0.04 of its potential returns per unit of risk. Loop Media is currently generating about -0.05 per unit of risk. If you would invest  1,490  in E W Scripps on February 13, 2024 and sell it today you would lose (1,129) from holding E W Scripps or give up 75.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

E W Scripps  vs.  Loop Media

E W Scripps

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E W Scripps has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Loop Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loop Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with E W and Loop Media

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

The idea behind E W Scripps and Loop Media 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.