Correlation Between News Corp and LiveOne

Can any of the company-specific risk be diversified away by investing in both News Corp and LiveOne 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 LiveOne 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 LiveOne, you can compare the effects of market volatilities on News Corp and LiveOne 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 LiveOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and LiveOne.

Diversification Opportunities for News Corp and LiveOne

-0.07

Correlation Coefficient

News Corp  LiveOne

Good diversification

The 3 months correlation between News and LiveOne is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne 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 LiveOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveOne has no effect on the direction of News Corp i.e., News Corp and LiveOne go up and down completely randomly.

Pair Corralation between News Corp and LiveOne

Given the investment horizon of 90 days News Corp A is expected to generate 0.15 times more return on investment than LiveOne. However, News Corp A is 6.88 times less risky than LiveOne. It trades about 0.16 of its potential returns per unit of risk. LiveOne is currently generating about -0.05 per unit of risk. If you would invest  2,683  in News Corp A on September 5, 2024 and sell it today you would earn a total of  303.00  from holding News Corp A or generate 11.29% return on investment over 90 days.

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

News Corp A  vs.  LiveOne

News Corp A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, News Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

LiveOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LiveOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with News Corp and LiveOne

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

The idea behind News Corp A and LiveOne 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.