Correlation Between Fox Corp and RegalWorks Media

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

By analyzing existing cross correlation between Fox Corp Class and RegalWorks Media, you can compare the effects of market volatilities on Fox Corp and RegalWorks Media 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 Fox Corp with a short position of RegalWorks Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Corp and RegalWorks Media.

Diversification Opportunities for Fox Corp and RegalWorks Media

0.59

Correlation Coefficient

Fox Corp  RegalWorks Media

Very weak diversification

The 3 months correlation between Fox and RegalWorks is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fox Corp Class and RegalWorks Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RegalWorks Media and Fox 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 Fox Corp Class are associated (or correlated) with RegalWorks Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RegalWorks Media has no effect on the direction of Fox Corp i.e., Fox Corp and RegalWorks Media go up and down completely randomly.

Pair Corralation between Fox Corp and RegalWorks Media

Considering the 90-day investment horizon Fox Corp Class is expected to generate 0.16 times more return on investment than RegalWorks Media. However, Fox Corp Class is 6.08 times less risky than RegalWorks Media. It trades about 0.01 of its potential returns per unit of risk. RegalWorks Media is currently generating about -0.02 per unit of risk. If you would invest  2,878  in Fox Corp Class on January 24, 2024 and sell it today you would earn a total of  19.00  from holding Fox Corp Class or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Fox Corp Class  vs.  RegalWorks Media

Fox Corp Class

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Fox Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

RegalWorks Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RegalWorks Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Fox Corp and RegalWorks Media

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

The idea behind Fox Corp Class and RegalWorks Media 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 Global Correlations module to find global opportunities by holding instruments from different markets.