Correlation Between News Corp and Manchester United
Can any of the company-specific risk be diversified away by investing in both News Corp and Manchester United 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 Manchester United 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 Manchester United, you can compare the effects of market volatilities on News Corp and Manchester United 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 Manchester United. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Manchester United.
Diversification Opportunities for News Corp and Manchester United
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between News and Manchester is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and Manchester United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manchester United 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 Manchester United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manchester United has no effect on the direction of News Corp i.e., News Corp and Manchester United go up and down completely randomly.
Pair Corralation between News Corp and Manchester United
Given the investment horizon of 90 days News Corp A is expected to generate 0.76 times more return on investment than Manchester United. However, News Corp A is 1.32 times less risky than Manchester United. It trades about 0.07 of its potential returns per unit of risk. Manchester United is currently generating about -0.01 per unit of risk. If you would invest 2,797 in News Corp A on August 28, 2024 and sell it today you would earn a total of 149.00 from holding News Corp A or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp A vs. Manchester United
Performance |
| Timeline |
| News Corp A |
| Manchester United |
News Corp and Manchester United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Manchester United
The main advantage of trading using opposite News Corp and Manchester United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Manchester United 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 Manchester United will offset losses from the drop in Manchester United's long position.| News Corp vs. New York Times | News Corp vs. Gannett Co | News Corp vs. Lee Enterprises Incorporated | News Corp vs. Pearson PLC ADR |
| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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