Correlation Between News Corp and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both News Corp and Baker Hughes 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 News Corp and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corp Cl and Baker Hughes Co, you can compare the effects of market volatilities on News Corp and Baker Hughes 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 News Corp with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Baker Hughes.
Diversification Opportunities for News Corp and Baker Hughes
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between News and Baker is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding News Corp Cl and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and News Corp 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 News Corp Cl are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of News Corp i.e., News Corp and Baker Hughes go up and down completely randomly.
Pair Corralation between News Corp and Baker Hughes
Assuming the 90 days trading horizon News Corp Cl is expected to generate 0.94 times more return on investment than Baker Hughes. However, News Corp Cl is 1.06 times less risky than Baker Hughes. It trades about 0.07 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.05 per unit of risk. If you would invest 1,894 in News Corp Cl on September 3, 2024 and sell it today you would earn a total of 1,020 from holding News Corp Cl or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.72% |
| Values | Daily Returns |
News Corp Cl vs. Baker Hughes Co
Performance |
| Timeline |
| News Corp Cl |
| Baker Hughes |
News Corp and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Baker Hughes
The main advantage of trading using opposite News Corp and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| News Corp vs. Sunny Optical Technology | News Corp vs. Vitec Software Group | News Corp vs. Take Two Interactive Software | News Corp vs. Zurich Insurance Group |
| Baker Hughes vs. Abingdon Health Plc | Baker Hughes vs. Schroders Investment Trusts | Baker Hughes vs. Universal Health Services | Baker Hughes vs. Aberdeen Diversified Income |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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