Correlation Between Liberty Media and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Industrivarden 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 Industrivarden 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 Industrivarden AB ser, you can compare the effects of market volatilities on Liberty Media and Industrivarden 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 Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Industrivarden.
Diversification Opportunities for Liberty Media and Industrivarden
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liberty and Industrivarden is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Liberty Media i.e., Liberty Media and Industrivarden go up and down completely randomly.
Pair Corralation between Liberty Media and Industrivarden
Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 1.44 times more return on investment than Industrivarden. However, Liberty Media is 1.44 times more volatile than Industrivarden AB ser. It trades about 0.11 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.09 per unit of risk. If you would invest 5,966 in Liberty Media Corp on November 3, 2024 and sell it today you would earn a total of 2,782 from holding Liberty Media Corp or generate 46.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Liberty Media Corp vs. Industrivarden AB ser
Performance |
| Timeline |
| Liberty Media Corp |
| Industrivarden AB ser |
Liberty Media and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Industrivarden
The main advantage of trading using opposite Liberty Media and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Liberty Media vs. Check Point Software | Liberty Media vs. Learning Technologies Group | Liberty Media vs. Hochschild Mining plc | Liberty Media vs. Polar Capital Technology |
| Industrivarden vs. Teradata Corp | Industrivarden vs. Public Storage | Industrivarden vs. One Media iP | Industrivarden vs. Silver Bullet Data |
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 CEOs Directory module to screen CEOs from public companies around the world.
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