Correlation Between Tegna and News Corp

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

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

Diversification Opportunities for Tegna and News Corp

-0.12

Correlation Coefficient

Tegna  News Corp

Good diversification

The 3 months correlation between Tegna and News is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and News Corp B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp B and Tegna 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 Tegna Inc 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 B has no effect on the direction of Tegna i.e., Tegna and News Corp go up and down completely randomly.

Pair Corralation between Tegna and News Corp

Given the investment horizon of 90 days Tegna Inc is expected to generate 1.31 times more return on investment than News Corp. However, Tegna is 1.31 times more volatile than News Corp B. It trades about 0.01 of its potential returns per unit of risk. News Corp B is currently generating about -0.01 per unit of risk. If you would invest  1,825  in Tegna Inc on December 27, 2024 and sell it today you would earn a total of  4.00  from holding Tegna Inc or generate 0.22% return on investment over 90 days.

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

Tegna Inc  vs.  News Corp B

Tegna Inc

Risk-Adjusted Performance

Weak

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

News Corp B

Risk-Adjusted Performance

Very Weak

Over the last 90 days News Corp B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, News Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tegna and News Corp

The main advantage of trading using opposite Tegna and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna 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 Tegna Inc and News Corp B 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.