Correlation Between News Corp and Baosheng Media

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

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

Diversification Opportunities for News Corp and Baosheng Media

-0.68

Correlation Coefficient

News Corp  Baosheng Media

Excellent diversification

The 3 months correlation between News and Baosheng is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group 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 B are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of News Corp i.e., News Corp and Baosheng Media go up and down completely randomly.

Pair Corralation between News Corp and Baosheng Media

Considering the 90-day investment horizon News Corp B is expected to generate 0.29 times more return on investment than Baosheng Media. However, News Corp B is 3.44 times less risky than Baosheng Media. It trades about 0.39 of its potential returns per unit of risk. Baosheng Media Group is currently generating about 0.03 per unit of risk. If you would invest  2,929  in News Corp B on September 5, 2024 and sell it today you would earn a total of  350.00  from holding News Corp B or generate 11.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

News Corp B  vs.  Baosheng Media Group

News Corp B

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp B are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, News Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Baosheng Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baosheng Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with News Corp and Baosheng Media

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

The idea behind News Corp B and Baosheng Media Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.