Correlation Between Fox Corp and Cable One
Can any of the company-specific risk be diversified away by investing in both Fox Corp and Cable One 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 Fox Corp and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fox Corp Class and Cable One, you can compare the effects of market volatilities on Fox Corp and Cable One 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 Fox Corp with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Corp and Cable One.
Diversification Opportunities for Fox Corp and Cable One
Almost no diversification
The 3 months correlation between Fox and Cable is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fox Corp Class and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Fox 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 Fox Corp Class are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Fox Corp i.e., Fox Corp and Cable One go up and down completely randomly.
Pair Corralation between Fox Corp and Cable One
Considering the 90-day investment horizon Fox Corp is expected to generate 1.47 times less return on investment than Cable One. But when comparing it to its historical volatility, Fox Corp Class is 2.42 times less risky than Cable One. It trades about 0.25 of its potential returns per unit of risk. Cable One is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 34,979 in Cable One on August 30, 2024 and sell it today you would earn a total of 6,978 from holding Cable One or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fox Corp Class vs. Cable One
Performance |
| Timeline |
| Fox Corp Class |
| Cable One |
Fox Corp and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fox Corp and Cable One
The main advantage of trading using opposite Fox Corp and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Corp position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Fox Corp vs. News Corp A | Fox Corp vs. News Corp B | Fox Corp vs. Paramount Global Class | Fox Corp vs. Liberty Media |
| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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