Correlation Between News Corp and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both News Corp and AB Electrolux 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 AB Electrolux 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 AB Electrolux, you can compare the effects of market volatilities on News Corp and AB Electrolux 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 AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and AB Electrolux.
Diversification Opportunities for News Corp and AB Electrolux
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between News and ELUXF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux 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 AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of News Corp i.e., News Corp and AB Electrolux go up and down completely randomly.
Pair Corralation between News Corp and AB Electrolux
If you would invest (100.00) in AB Electrolux on January 18, 2024 and sell it today you would earn a total of 100.00 from holding AB Electrolux or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
News Corp A vs. AB Electrolux
Performance |
Timeline |
News Corp A |
AB Electrolux |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
News Corp and AB Electrolux Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with News Corp and AB Electrolux
The main advantage of trading using opposite News Corp and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, AB Electrolux 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 AB Electrolux will offset losses from the drop in AB Electrolux's long position.The idea behind News Corp A and AB Electrolux 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.AB Electrolux vs. BCE Inc | AB Electrolux vs. Ziff Davis | AB Electrolux vs. Reservoir Media | AB Electrolux vs. Anterix |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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