Correlation Between News Corp and Color Star

Can any of the company-specific risk be diversified away by investing in both News Corp and Color Star 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 Color Star into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between News Corp B and Color Star Technology, you can compare the effects of market volatilities on News Corp and Color Star 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 Color Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Color Star.

Diversification Opportunities for News Corp and Color Star

-0.55

Correlation Coefficient

News Corp  Color Star

Excellent diversification

The 3 months correlation between News and Color is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Color Star Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Color Star Technology 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 B are associated (or correlated) with Color Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Color Star Technology has no effect on the direction of News Corp i.e., News Corp and Color Star go up and down completely randomly.

Pair Corralation between News Corp and Color Star

Considering the 90-day investment horizon News Corp B is expected to generate 0.09 times more return on investment than Color Star. However, News Corp B is 11.48 times less risky than Color Star. It trades about 0.15 of its potential returns per unit of risk. Color Star Technology is currently generating about -0.34 per unit of risk. If you would invest  2,777  in News Corp B on October 1, 2024 and sell it today you would earn a total of  301.00  from holding News Corp B or generate 10.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

News Corp B  vs.  Color Star Technology

News Corp B

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp B are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, News Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Color Star Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with News Corp and Color Star

The main advantage of trading using opposite News Corp and Color Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, Color Star 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 Color Star will offset losses from the drop in Color Star's long position.

The idea behind News Corp B and Color Star Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.