Correlation Between News and SES SA
Can any of the company-specific risk be diversified away by investing in both News and SES SA 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 and SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corporation and SES SA, you can compare the effects of market volatilities on News and SES SA 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 with a short position of SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of News and SES SA.
Diversification Opportunities for News and SES SA
Very good diversification
The 3 months correlation between News and SES is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding News Corp. and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA and News 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 Corporation are associated (or correlated) with SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of News i.e., News and SES SA go up and down completely randomly.
Pair Corralation between News and SES SA
Assuming the 90 days trading horizon News Corporation is expected to under-perform the SES SA. But the stock apears to be less risky and, when comparing its historical volatility, News Corporation is 1.96 times less risky than SES SA. The stock trades about -0.09 of its potential returns per unit of risk. The SES SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 343.00 in SES SA on January 10, 2025 and sell it today you would earn a total of 142.00 from holding SES SA or generate 41.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp. vs. SES SA
Performance |
| Timeline |
| News |
| SES SA |
News and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News and SES SA
The main advantage of trading using opposite News and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| News vs. ALTAIR RES INC | News vs. Norwegian Air Shuttle | News vs. BJs Restaurants | News vs. AFRICAN MEDIA ENT |
| SES SA vs. VIVENDI UNSPONARD EO | SES SA vs. News Corporation | SES SA vs. News Corporation | SES SA vs. RTL Group SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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