Correlation Between News Corp and MGO Global

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

Diversification Opportunities for News Corp and MGO Global

-0.7

Correlation Coefficient

News Corp  MGO Global

Excellent diversification

The 3 months correlation between News and MGO is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of News Corp i.e., News Corp and MGO Global go up and down completely randomly.

Pair Corralation between News Corp and MGO Global

Considering the 90-day investment horizon News Corp B is expected to generate 0.29 times more return on investment than MGO Global. However, News Corp B is 3.42 times less risky than MGO Global. It trades about 0.23 of its potential returns per unit of risk. MGO Global Common is currently generating about -0.08 per unit of risk. If you would invest  2,738  in News Corp B on September 13, 2024 and sell it today you would earn a total of  476.00  from holding News Corp B or generate 17.38% return on investment over 90 days.

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

News Corp B  vs.  MGO Global Common

News Corp B

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp B are ranked lower than 18 (%) 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.

MGO Global Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MGO Global Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with News Corp and MGO Global

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

The idea behind News Corp B and MGO Global Common 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 Stocks Directory module to find actively traded stocks across global markets.