Correlation Between Tegna and Disney
Can any of the company-specific risk be diversified away by investing in both Tegna and Disney 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 Tegna and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tegna Inc and Walt Disney, you can compare the effects of market volatilities on Tegna and Disney 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 Tegna with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and Disney.
Diversification Opportunities for Tegna and Disney
Very poor diversification
The 3 months correlation between Tegna and Disney is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Tegna 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 Tegna Inc are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Tegna i.e., Tegna and Disney go up and down completely randomly.
Pair Corralation between Tegna and Disney
Given the investment horizon of 90 days Tegna is expected to generate 3.82 times less return on investment than Disney. In addition to that, Tegna is 1.15 times more volatile than Walt Disney. It trades about 0.01 of its total potential returns per unit of risk. Walt Disney is currently generating about 0.04 per unit of volatility. If you would invest 9,265 in Walt Disney on August 30, 2024 and sell it today you would earn a total of 2,495 from holding Walt Disney or generate 26.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tegna Inc vs. Walt Disney
Performance |
| Timeline |
| Tegna Inc |
| Walt Disney |
Tegna and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tegna and Disney
The main advantage of trading using opposite Tegna and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Tegna vs. News Corp B | Tegna vs. News Corp A | Tegna vs. Live Nation Entertainment | Tegna vs. Paramount Global Class |
| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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