Correlation Between News Corp and Lithium One
Can any of the company-specific risk be diversified away by investing in both News Corp and Lithium 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 News Corp and Lithium One 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 Lithium One Metals, you can compare the effects of market volatilities on News Corp and Lithium 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 News Corp with a short position of Lithium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Lithium One.
Diversification Opportunities for News Corp and Lithium One
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between News and Lithium is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Lithium One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium One Metals 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 Lithium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium One Metals has no effect on the direction of News Corp i.e., News Corp and Lithium One go up and down completely randomly.
Pair Corralation between News Corp and Lithium One
Considering the 90-day investment horizon News Corp B is expected to generate 0.11 times more return on investment than Lithium One. However, News Corp B is 9.11 times less risky than Lithium One. It trades about 0.36 of its potential returns per unit of risk. Lithium One Metals is currently generating about -0.07 per unit of risk. If you would invest 2,908 in News Corp B on September 2, 2024 and sell it today you would earn a total of 301.00 from holding News Corp B or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp B vs. Lithium One Metals
Performance |
| Timeline |
| News Corp B |
| Lithium One Metals |
News Corp and Lithium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Lithium One
The main advantage of trading using opposite News Corp and Lithium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Lithium 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 Lithium One will offset losses from the drop in Lithium One's long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
| Lithium One vs. SunLink Health Systems | Lithium One vs. Capital Clean Energy | Lithium One vs. National Vision Holdings | Lithium One vs. SkyWest |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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