News Corp stock (NASDAQ: NWSA), a global, diversified media and information services company, experienced around a 5% fall over the last week (five trading days) to levels of near $24 currently. But will NWSA’s stock see higher levels over the coming weeks, or is a further decline in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price, returns for NWSA stock are flat on average in the next one-month (twenty-one trading days) period after experiencing a 5.1% decline in a week. But how would these numbers change if you are interested in holding NWSA stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test NWSA stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
MACHINE LEARNING ENGINE – try it yourself:
IF NWSA stock moved by -5% over five trading days, THEN over the next twenty-one trading days, NWSA stock moves an average of 0.1%, with a 47% probability of a positive return over this period.
Some Fun Scenarios, FAQs & Making Sense of NWSA Stock Movements:
Question 1: Is the average return for NWSA stock higher after a drop?
Answer: Consider two situations,
Case 1: NWSA stock drops by -5% or more in a week
Case 2: NWSA stock rises by 5% or more in a week
Is the average return for NWSA stock higher over the subsequent month after Case 1 or Case 2?
NWSA stock fares better after Case 2, with an average return of 0.1% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 3.2% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how NWSA stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
Answer: If you buy and hold NWSA stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
You can try the engine to see what this table looks like for NWSA after a larger loss over the last week, month, or quarter.
Question 3: What about the average return after a rise if you wait for a while?
Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although NWSA stock appears to be an exception to this general observation.
NWSA’s returns over the next N days after a 5% change over the last five trading days are detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for NWSA stock by changing the inputs in the charts above.