Correlation Between Liberty Media and Eastinco Mining
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Eastinco Mining 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 Eastinco Mining 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 Eastinco Mining Exploration, you can compare the effects of market volatilities on Liberty Media and Eastinco Mining 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 Eastinco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Eastinco Mining.
Diversification Opportunities for Liberty Media and Eastinco Mining
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Eastinco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl 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 Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of Liberty Media i.e., Liberty Media and Eastinco Mining go up and down completely randomly.
Pair Corralation between Liberty Media and Eastinco Mining
Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 2.51 times more return on investment than Eastinco Mining. However, Liberty Media is 2.51 times more volatile than Eastinco Mining Exploration. It trades about 0.19 of its potential returns per unit of risk. Eastinco Mining Exploration is currently generating about 0.41 per unit of risk. If you would invest 7,454 in Liberty Media Corp on September 4, 2024 and sell it today you would earn a total of 601.00 from holding Liberty Media Corp or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media Corp vs. Eastinco Mining Exploration
Performance |
| Timeline |
| Liberty Media Corp |
| Eastinco Mining Expl |
Liberty Media and Eastinco Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Eastinco Mining
The main advantage of trading using opposite Liberty Media and Eastinco Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Eastinco Mining 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 Eastinco Mining will offset losses from the drop in Eastinco Mining's long position.| Liberty Media vs. Teradata Corp | Liberty Media vs. Aeorema Communications Plc | Liberty Media vs. Charter Communications Cl | Liberty Media vs. Austevoll Seafood ASA |
| Eastinco Mining vs. Antofagasta PLC | Eastinco Mining vs. Atalaya Mining | Eastinco Mining vs. Ferrexpo PLC | Eastinco Mining vs. Amaroq Minerals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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