Correlation Between News Corp and Innovid Corp
Can any of the company-specific risk be diversified away by investing in both News Corp and Innovid Corp 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 Innovid Corp 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 Innovid Corp, you can compare the effects of market volatilities on News Corp and Innovid Corp 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 Innovid Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Innovid Corp.
Diversification Opportunities for News Corp and Innovid Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between News and Innovid is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Innovid Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovid Corp 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 Innovid Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovid Corp has no effect on the direction of News Corp i.e., News Corp and Innovid Corp go up and down completely randomly.
Pair Corralation between News Corp and Innovid Corp
Considering the 90-day investment horizon News Corp B is expected to under-perform the Innovid Corp. But the stock apears to be less risky and, when comparing its historical volatility, News Corp B is 1.35 times less risky than Innovid Corp. The stock trades about -0.26 of its potential returns per unit of risk. The Innovid Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Innovid Corp on September 23, 2024 and sell it today you would earn a total of 12.00 from holding Innovid Corp or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp B vs. Innovid Corp
Performance |
| Timeline |
| News Corp B |
| Innovid Corp |
News Corp and Innovid Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Innovid Corp
The main advantage of trading using opposite News Corp and Innovid Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Innovid Corp 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 Innovid Corp will offset losses from the drop in Innovid Corp's long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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