Correlation Between Liberty Media and Systemair
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Systemair 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 Systemair 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 Systemair AB, you can compare the effects of market volatilities on Liberty Media and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Systemair.
Diversification Opportunities for Liberty Media and Systemair
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Systemair is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Liberty Media i.e., Liberty Media and Systemair go up and down completely randomly.
Pair Corralation between Liberty Media and Systemair
Assuming the 90 days trading horizon Liberty Media is expected to generate 1.36 times less return on investment than Systemair. But when comparing it to its historical volatility, Liberty Media Corp is 1.02 times less risky than Systemair. It trades about 0.21 of its potential returns per unit of risk. Systemair AB is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 8,180 in Systemair AB on September 2, 2024 and sell it today you would earn a total of 1,030 from holding Systemair AB or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media Corp vs. Systemair AB
Performance |
| Timeline |
| Liberty Media Corp |
| Systemair AB |
Liberty Media and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Systemair
The main advantage of trading using opposite Liberty Media and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Liberty Media vs. Creo Medical Group | Liberty Media vs. Hochschild Mining plc | Liberty Media vs. Futura Medical | Liberty Media vs. Medical Properties Trust |
| Systemair vs. Tyson Foods Cl | Systemair vs. Bell Food Group | Systemair vs. Tata Steel Limited | Systemair vs. JLEN Environmental Assets |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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