Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>
Context: The <a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group (REA AU)</a> vs. <a href="https://www.smartkarma.com/entities/news-corp" target="_blank" data-smartkarma-citation="entities:26926:1" rel="noopener">News Corp (NWS AU)</a> price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.</li>
<li>
Highlights: Going long REA Group (REA AU) and short News Corp (NWS AU) targets a 5% return.</li>
<li>
Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.</li>
</ul>



Context: The REA Group (REA AU) vs. News Corp (NWS AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.

Highlights: Going long REA Group (REA AU) and short News Corp (NWS AU) targets a 5% return.

Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.


Long REA Group (REA AU) Vs. Short News Corp (NWS AU): Spread Opens up Mean-Reversion Opportunity

Financial News, Analysis and Data, FNArena

FNArena

Financial News, Analysis and Data

Online financial media company focused on Australian equities, with a global perspective

<ul><li>REA Group&rsquo;s September quarter results broadly met expectations, though investors continue to question management over competition and AI-related risks.</li><li> REA Group&rsquo;s September quarter meets expectations Unchanged yield guidance allays market concerns Analysts use conference call to ask questions about artificial intelligence and competition risks Morgans maintains REA is one of the highest-quality franchises under its ASX coverage</li></ul>

REA Group&rsquo;s September quarter results broadly met expectations, though investors continue to question management over competition and AI-related risks. REA Group&rsquo;s September quarter meets expectations Unchanged yield guidance allays market concerns Analysts use conference call to ask questions about artificial intelligence and competition risks Morgans maintains REA is one of the highest-quality franchises under its ASX coverage

AI & Competitor Anxiety Dominate REA Sentiment

<ul><li>FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts.</li><li>Today's idea is REA Group.</li><li> -History suggests there is too much concern around Co-Star's entry into the Australian market -RBC Capital suggests ACCC probe is likely to have a negligible outcome -REA's competitive position, network effects and pricing model place remain robust -The stock's valuation looks compelling within historical context</li></ul>

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts.Today's idea is REA Group. -History suggests there is too much concern around Co-Star's entry into the Australian market -RBC Capital suggests ACCC probe is likely to have a negligible outcome -REA's competitive position, network effects and pricing model place remain robust -The stock's valuation looks compelling within historical context

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After a protracted succession stoush, Rupert Murdoch's son Lachlan is set to take control of <a href="https://www.smartkarma.com/entities/news-corp-class-b" target="_blank" data-smartkarma-citation="entities:5990:1" rel="noopener">News Corp (NWS US)</a> and <a href="https://www.smartkarma.com/entities/fox-corp-b470c4a5-c947-401c-af9f-3e6497d73406" target="_blank" data-smartkarma-citation="entities:36135:1" rel="noopener">Fox (FOXA US)</a>.</li>
<li>Preceding my comments on News Corp and 62%-held <a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a> are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


After a protracted succession stoush, Rupert Murdoch's son Lachlan is set to take control of News Corp (NWS US) and Fox (FOXA US).
Preceding my comments on News Corp and 62%-held REA Group Ltd (REA AU) are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: The Murdoch Succession Into News Corp, Fox & REA

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Nov 28th (reported today). The aggregated short interest was USD27.2bn.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Lynas Rare Earths, James Hardie Industries, Transurban, CAR, Macquarie.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Nov 28th (reported today). The aggregated short interest was USD27.2bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Lynas Rare Earths, James Hardie Industries, Transurban, CAR, Macquarie.


ASX Short Interest Weekly (Nov 28th): Lynas Rare Earths, James Hardie Industries, Transurban, CAR

Australia

REA Group Limited provides online property listings, web development and internet related technology services to the real estate industry along with providing advertising services to Australian companies.  The Company also offers online real estate search services to the Australian public.

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REA Group Ltd (REA AU)

Long REA Group (REA AU) Vs. Short News Corp (NWS AU): Spread Opens up Mean-Reversion Opportunity

Pair trade with a 5% target-return amid significant deviation of the price-ratio between REA Group (REA AU) and News Corp (NWS AU). Ideal for quant...

Gaudenz Schneider

AI & Competitor Anxiety Dominate REA Sentiment

REA Group’s September quarter results broadly met expectations, though investors continue to question management over competition and AI-related...

FNArena

Treasure Chest: REA Group

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is REA Group. -History suggests there is...

FNArena

StubWorld: The Murdoch Succession Into News Corp, Fox & REA

Current levels for News Corp are elevated but not extreme. If in, I'd look to unwind the stub, with a view to reversing - short News Corp, Long REA.

David Blennerhassett

ASX Short Interest Weekly (Nov 28th): Lynas Rare Earths, James Hardie Industries, Transurban, CAR

We analyzed ASX short interest report for the past week and highlight short interest changes in Lynas Rare Earths, James Hardie Industries,...

Ke Yan, CFA, FRM

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