Correlation Between GM and Fox Corp

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

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

Diversification Opportunities for GM and Fox Corp

0.73

Correlation Coefficient

GM  Fox Corp

Poor diversification

The 3 months correlation between GM and Fox is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Fox Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Corp Class and GM 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 General Motors are associated (or correlated) with Fox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Corp Class has no effect on the direction of GM i.e., GM and Fox Corp go up and down completely randomly.

Pair Corralation between GM and Fox Corp

Allowing for the 90-day total investment horizon General Motors is expected to generate 1.5 times more return on investment than Fox Corp. However, GM is 1.5 times more volatile than Fox Corp Class. It trades about 0.12 of its potential returns per unit of risk. Fox Corp Class is currently generating about 0.11 per unit of risk. If you would invest  4,533  in General Motors on May 7, 2025 and sell it today you would earn a total of  744.00  from holding General Motors or generate 16.41% return on investment over 90 days.

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

General Motors  vs.  Fox Corp Class

General Motors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

Fox Corp Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fox Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with GM and Fox Corp

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

The idea behind General Motors and Fox Corp Class 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.