Correlation Between CuriosityStream and News Corp

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

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

Diversification Opportunities for CuriosityStream and News Corp

0.4

Correlation Coefficient

CuriosityStream  News Corp

Very weak diversification

The 3 months correlation between CuriosityStream and News is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CuriosityStream and News Corp B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp B and CuriosityStream 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 CuriosityStream are associated (or correlated) with News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp B has no effect on the direction of CuriosityStream i.e., CuriosityStream and News Corp go up and down completely randomly.

Pair Corralation between CuriosityStream and News Corp

Assuming the 90 days horizon CuriosityStream is expected to generate 79.54 times more return on investment than News Corp. However, CuriosityStream is 79.54 times more volatile than News Corp B. It trades about 0.11 of its potential returns per unit of risk. News Corp B is currently generating about 0.1 per unit of risk. If you would invest  10.00  in CuriosityStream on November 28, 2024 and sell it today you would lose (6.94) from holding CuriosityStream or give up 69.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.17%
Values	Daily Returns

CuriosityStream  vs.  News Corp B

CuriosityStream

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

News Corp B

Risk-Adjusted Performance

Very Weak

Over the last 90 days News Corp B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, News Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CuriosityStream and News Corp

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

The idea behind CuriosityStream and News Corp B 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..