Correlation Between Marchex and Fox Corp

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

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

Diversification Opportunities for Marchex and Fox Corp

0.13

Correlation Coefficient

Marchex  Fox Corp

Average diversification

The 3 months correlation between Marchex and Fox is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Fox Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Corp Class and Marchex 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 Marchex are associated (or correlated) with Fox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Corp Class has no effect on the direction of Marchex i.e., Marchex and Fox Corp go up and down completely randomly.

Pair Corralation between Marchex and Fox Corp

Given the investment horizon of 90 days Marchex is expected to under-perform the Fox Corp. In addition to that, Marchex is 2.02 times more volatile than Fox Corp Class. It trades about -0.02 of its total potential returns per unit of risk. Fox Corp Class is currently generating about 0.1 per unit of volatility. If you would invest  4,959  in Fox Corp Class on December 25, 2024 and sell it today you would earn a total of  380.00  from holding Fox Corp Class or generate 7.66% return on investment over 90 days.

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

Marchex  vs.  Fox Corp Class

Marchex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Marchex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fox Corp Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fox Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Marchex and Fox Corp

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

The idea behind Marchex and Fox Corp Class 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.