Correlation Between Fox Corp and IHeartMedia
Can any of the company-specific risk be diversified away by investing in both Fox Corp and IHeartMedia 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 IHeartMedia 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 iHeartMedia Class A, you can compare the effects of market volatilities on Fox Corp and IHeartMedia 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 IHeartMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Corp and IHeartMedia.
Diversification Opportunities for Fox Corp and IHeartMedia
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fox and IHeartMedia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fox Corp Class and iHeartMedia Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iHeartMedia Class 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 IHeartMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iHeartMedia Class has no effect on the direction of Fox Corp i.e., Fox Corp and IHeartMedia go up and down completely randomly.
Pair Corralation between Fox Corp and IHeartMedia
Given the investment horizon of 90 days Fox Corp Class is expected to generate 0.23 times more return on investment than IHeartMedia. However, Fox Corp Class is 4.27 times less risky than IHeartMedia. It trades about 0.07 of its potential returns per unit of risk. iHeartMedia Class A is currently generating about -0.01 per unit of risk. If you would invest 3,037 in Fox Corp Class on August 30, 2024 and sell it today you would earn a total of 1,634 from holding Fox Corp Class or generate 53.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fox Corp Class vs. iHeartMedia Class A
Performance |
| Timeline |
| Fox Corp Class |
| iHeartMedia Class |
Fox Corp and IHeartMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fox Corp and IHeartMedia
The main advantage of trading using opposite Fox Corp and IHeartMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Corp position performs unexpectedly, IHeartMedia 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 IHeartMedia will offset losses from the drop in IHeartMedia's long position.| Fox Corp vs. News Corp B | Fox Corp vs. News Corp A | Fox Corp vs. Live Nation Entertainment | Fox Corp vs. Paramount Global Class |
| IHeartMedia vs. Beasley Broadcast Group | IHeartMedia vs. Saga Communications | IHeartMedia vs. E W Scripps | IHeartMedia vs. Gray Television |
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 CEOs Directory module to screen CEOs from public companies around the world.
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