Correlation Between News Corp and Abits
Can any of the company-specific risk be diversified away by investing in both News Corp and Abits 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 Abits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corp B and Abits Group, you can compare the effects of market volatilities on News Corp and Abits 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 Abits. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Abits.
Diversification Opportunities for News Corp and Abits
Very poor diversification
The 3 months correlation between News and Abits is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Abits Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abits Group 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 B are associated (or correlated) with Abits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abits Group has no effect on the direction of News Corp i.e., News Corp and Abits go up and down completely randomly.
Pair Corralation between News Corp and Abits
Considering the 90-day investment horizon News Corp B is expected to generate 0.22 times more return on investment than Abits. However, News Corp B is 4.5 times less risky than Abits. It trades about 0.11 of its potential returns per unit of risk. Abits Group is currently generating about 0.02 per unit of risk. If you would invest 1,898 in News Corp B on September 2, 2024 and sell it today you would earn a total of 1,311 from holding News Corp B or generate 69.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp B vs. Abits Group
Performance |
| Timeline |
| News Corp B |
| Abits Group |
News Corp and Abits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Abits
The main advantage of trading using opposite News Corp and Abits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Abits 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 Abits will offset losses from the drop in Abits' long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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