Correlation Between News Corp and Gray Television
Can any of the company-specific risk be diversified away by investing in both News Corp and Gray Television 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 Gray Television 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 Gray Television, you can compare the effects of market volatilities on News Corp and Gray Television 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 Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Gray Television.
Diversification Opportunities for News Corp and Gray Television
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between News and Gray is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television 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 Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of News Corp i.e., News Corp and Gray Television go up and down completely randomly.
Pair Corralation between News Corp and Gray Television
Given the investment horizon of 90 days News Corp A is expected to under-perform the Gray Television. But the stock apears to be less risky and, when comparing its historical volatility, News Corp A is 2.46 times less risky than Gray Television. The stock trades about -0.37 of its potential returns per unit of risk. The Gray Television is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Gray Television on January 27, 2024 and sell it today you would lose (45.00) from holding Gray Television or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp A vs. Gray Television
Performance |
| Timeline |
| News Corp A |
| Gray Television |
News Corp and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and Gray Television
The main advantage of trading using opposite News Corp and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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