Correlation Between Liberty Media and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Liberty Media and G5 Entertainment 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 G5 Entertainment 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 G5 Entertainment AB, you can compare the effects of market volatilities on Liberty Media and G5 Entertainment 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 G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and G5 Entertainment.
Diversification Opportunities for Liberty Media and G5 Entertainment
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and 0QUS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment 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 G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Liberty Media i.e., Liberty Media and G5 Entertainment go up and down completely randomly.
Pair Corralation between Liberty Media and G5 Entertainment
Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 0.66 times more return on investment than G5 Entertainment. However, Liberty Media Corp is 1.51 times less risky than G5 Entertainment. It trades about 0.09 of its potential returns per unit of risk. G5 Entertainment AB is currently generating about -0.05 per unit of risk. If you would invest 5,768 in Liberty Media Corp on August 25, 2024 and sell it today you would earn a total of 2,010 from holding Liberty Media Corp or generate 34.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Liberty Media Corp vs. G5 Entertainment AB
Performance |
| Timeline |
| Liberty Media Corp |
| G5 Entertainment |
Liberty Media and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and G5 Entertainment
The main advantage of trading using opposite Liberty Media and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| Liberty Media vs. Samsung Electronics Co | Liberty Media vs. Samsung Electronics Co | Liberty Media vs. Hyundai Motor | Liberty Media vs. Toyota Motor Corp |
| G5 Entertainment vs. Samsung Electronics Co | G5 Entertainment vs. Samsung Electronics Co | G5 Entertainment vs. Hyundai Motor | G5 Entertainment vs. Toyota Motor Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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