Correlation Between Liberty Media and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Grieg Seafood 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 Liberty Media and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media Corp and Grieg Seafood, you can compare the effects of market volatilities on Liberty Media and Grieg Seafood 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 Liberty Media with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Grieg Seafood.
Diversification Opportunities for Liberty Media and Grieg Seafood
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Grieg is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Liberty Media 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 Liberty Media Corp are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Liberty Media i.e., Liberty Media and Grieg Seafood go up and down completely randomly.
Pair Corralation between Liberty Media and Grieg Seafood
Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 0.92 times more return on investment than Grieg Seafood. However, Liberty Media Corp is 1.09 times less risky than Grieg Seafood. It trades about 0.05 of its potential returns per unit of risk. Grieg Seafood is currently generating about -0.01 per unit of risk. If you would invest 5,512 in Liberty Media Corp on September 3, 2024 and sell it today you would earn a total of 2,634 from holding Liberty Media Corp or generate 47.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.48% |
| Values | Daily Returns |
Liberty Media Corp vs. Grieg Seafood
Performance |
| Timeline |
| Liberty Media Corp |
| Grieg Seafood |
Liberty Media and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Grieg Seafood
The main advantage of trading using opposite Liberty Media and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Liberty Media vs. The Mercantile Investment | Liberty Media vs. Power Metal Resources | Liberty Media vs. Capital Metals PLC | Liberty Media vs. European Metals Holdings |
| Grieg Seafood vs. Melia Hotels | Grieg Seafood vs. Capital Metals PLC | Grieg Seafood vs. Golden Metal Resources | Grieg Seafood vs. PPHE Hotel Group |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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