Correlation Between Fox Corp and Saga Communications

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

Diversification Opportunities for Fox Corp and Saga Communications

0.1

Correlation Coefficient

Fox Corp  Saga Communications

Average diversification

The 3 months correlation between Fox and Saga is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fox Corp Class and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications 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 Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of Fox Corp i.e., Fox Corp and Saga Communications go up and down completely randomly.

Pair Corralation between Fox Corp and Saga Communications

Considering the 90-day investment horizon Fox Corp is expected to generate 1.58 times less return on investment than Saga Communications. But when comparing it to its historical volatility, Fox Corp Class is 1.74 times less risky than Saga Communications. It trades about 0.08 of its potential returns per unit of risk. Saga Communications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,145  in Saga Communications on December 26, 2024 and sell it today you would earn a total of  110.00  from holding Saga Communications or generate 9.61% return on investment over 90 days.

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

Fox Corp Class  vs.  Saga Communications

Fox Corp Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fox Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Saga Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saga Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Saga Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fox Corp and Saga Communications

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

The idea behind Fox Corp Class and Saga Communications 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.