Correlation Between Roku and News Corp
Can any of the company-specific risk be diversified away by investing in both Roku and News 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 Roku and News Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and News Corp A, you can compare the effects of market volatilities on Roku and News 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 Roku with a short position of News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and News Corp.
Diversification Opportunities for Roku and News Corp
Very good diversification
The 3 months correlation between Roku and News is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and News Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp A and Roku 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 Roku Inc are associated (or correlated) with News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp A has no effect on the direction of Roku i.e., Roku and News Corp go up and down completely randomly.
Pair Corralation between Roku and News Corp
Given the investment horizon of 90 days Roku Inc is expected to under-perform the News Corp. In addition to that, Roku is 2.62 times more volatile than News Corp A. It trades about -0.03 of its total potential returns per unit of risk. News Corp A is currently generating about 0.1 per unit of volatility. If you would invest 2,198 in News Corp A on August 27, 2024 and sell it today you would earn a total of 751.00 from holding News Corp A or generate 34.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. News Corp A
Performance |
| Timeline |
| Roku Inc |
| News Corp A |
Roku and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and News Corp
The main advantage of trading using opposite Roku and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, News 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 News Corp will offset losses from the drop in News Corp's long position.| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
| News Corp vs. Marcus | News Corp vs. Liberty Media | News Corp vs. Warner Music Group | News Corp vs. Fox Corp Class |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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