Correlation Between News Corp and Roku
Can any of the company-specific risk be diversified away by investing in both News Corp and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on News Corp and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Roku.
Diversification Opportunities for News Corp and Roku
Good diversification
The 3 months correlation between News and Roku is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of News Corp i.e., News Corp and Roku go up and down completely randomly.
Pair Corralation between News Corp and Roku
Considering the 90-day investment horizon News Corp B is expected to generate 0.39 times more return on investment than Roku. However, News Corp B is 2.57 times less risky than Roku. It trades about 0.11 of its potential returns per unit of risk. Roku Inc is currently generating about -0.03 per unit of risk. If you would invest 2,298 in News Corp B on August 27, 2024 and sell it today you would earn a total of 908.00 from holding News Corp B or generate 39.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp B vs. Roku Inc
Performance |
| Timeline |
| News Corp B |
| Roku Inc |
News Corp and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Roku
The main advantage of trading using opposite News Corp and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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