Correlation Between News Corp and Cineverse Corp

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

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

Diversification Opportunities for News Corp and Cineverse Corp

0.79

Correlation Coefficient

News Corp  Cineverse Corp

Poor diversification

The 3 months correlation between News and Cineverse is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and Cineverse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineverse Corp 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 A are associated (or correlated) with Cineverse Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineverse Corp has no effect on the direction of News Corp i.e., News Corp and Cineverse Corp go up and down completely randomly.

Pair Corralation between News Corp and Cineverse Corp

Given the investment horizon of 90 days News Corp A is expected to generate 0.28 times more return on investment than Cineverse Corp. However, News Corp A is 3.61 times less risky than Cineverse Corp. It trades about -0.01 of its potential returns per unit of risk. Cineverse Corp is currently generating about -0.04 per unit of risk. If you would invest  2,738  in News Corp A on December 29, 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

News Corp A  vs.  Cineverse Corp

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.

Cineverse Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cineverse Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Cineverse Corp

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

The idea behind News Corp A and Cineverse Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.