Correlation Between News Corp and Fox Corp
Can any of the company-specific risk be diversified away by investing in both News Corp and Fox 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 Fox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corp A and Fox Corp Class, you can compare the effects of market volatilities on News Corp and Fox 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 Fox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Fox Corp.
Diversification Opportunities for News Corp and Fox Corp
Very weak diversification
The 3 months correlation between News and Fox is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and Fox Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Corp Class 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 A are associated (or correlated) with Fox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Corp Class has no effect on the direction of News Corp i.e., News Corp and Fox Corp go up and down completely randomly.
Pair Corralation between News Corp and Fox Corp
Given the investment horizon of 90 days News Corp A is expected to generate 0.9 times more return on investment than Fox Corp. However, News Corp A is 1.11 times less risky than Fox Corp. It trades about -0.04 of its potential returns per unit of risk. Fox Corp Class is currently generating about -0.03 per unit of risk. If you would invest 2,761 in News Corp A on October 20, 2024 and sell it today you would lose (18.00) from holding News Corp A or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp A vs. Fox Corp Class
Performance |
| Timeline |
| News Corp A |
| Fox Corp Class |
News Corp and Fox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Fox Corp
The main advantage of trading using opposite News Corp and Fox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Fox 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 Fox Corp will offset losses from the drop in Fox Corp's long position.| News Corp vs. Marcus | News Corp vs. Liberty Media | News Corp vs. Warner Music Group | News Corp vs. Fox Corp Class |
| Fox Corp vs. News Corp A | Fox Corp vs. News Corp B | Fox Corp vs. Paramount Global Class | Fox Corp vs. Liberty Media |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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