Correlation Between Marcus and News Corp

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

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

Diversification Opportunities for Marcus and News Corp

0.61

Correlation Coefficient

Marcus  News Corp

Poor diversification

The 3 months correlation between Marcus and News is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and News Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp A and Marcus 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 Marcus 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 A has no effect on the direction of Marcus i.e., Marcus and News Corp go up and down completely randomly.

Pair Corralation between Marcus and News Corp

Considering the 90-day investment horizon Marcus is expected to under-perform the News Corp. In addition to that, Marcus is 1.84 times more volatile than News Corp A. It trades about -0.13 of its total potential returns per unit of risk. News Corp A is currently generating about -0.02 per unit of volatility. If you would invest  2,738  in News Corp A on December 28, 2024 and sell it today you would lose (44.00) from holding News Corp A or give up 1.61% of portfolio value over 90 days.

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

Marcus  vs.  News Corp A

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

News Corp A

Risk-Adjusted Performance

Very Weak

Over the last 90 days News Corp A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, News Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marcus and News Corp

The main advantage of trading using opposite Marcus and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus 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 Marcus and News Corp A 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.