Correlation Between New York and Gannett

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

By analyzing existing cross correlation between New York Times and Gannett Co, you can compare the effects of market volatilities on New York and Gannett 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 New York with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Gannett.

Diversification Opportunities for New York and Gannett

0.67

Correlation Coefficient

New York  Gannett

Poor diversification

The 3 months correlation between New and Gannett is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding New York Times and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and New York 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 New York Times are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of New York i.e., New York and Gannett go up and down completely randomly.

Pair Corralation between New York and Gannett

Considering the 90-day investment horizon New York Times is expected to under-perform the Gannett. But the stock apears to be less risky and, when comparing its historical volatility, New York Times is 1.22 times less risky than Gannett. The stock trades about -0.08 of its potential returns per unit of risk. The Gannett Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  468.00  in Gannett Co on September 2, 2024 and sell it today you would earn a total of  51.00  from holding Gannett Co or generate 10.9% return on investment over 90 days.

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

New York Times  vs.  Gannett Co

New York Times

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in New York Times are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, New York is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Gannett

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gannett Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Gannett may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with New York and Gannett

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

The idea behind New York Times and Gannett Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.