Correlation Between Liberty Media and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Liberty Media and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Bankers Investment.
Diversification Opportunities for Liberty Media and Bankers Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and Bankers is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Liberty Media i.e., Liberty Media and Bankers Investment go up and down completely randomly.
Pair Corralation between Liberty Media and Bankers Investment
Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 2.23 times more return on investment than Bankers Investment. However, Liberty Media is 2.23 times more volatile than Bankers Investment Trust. It trades about 0.05 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.07 per unit of risk. If you would invest 6,470 in Liberty Media Corp on September 12, 2024 and sell it today you would earn a total of 1,763 from holding Liberty Media Corp or generate 27.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.44% |
| Values | Daily Returns |
Liberty Media Corp vs. Bankers Investment Trust
Performance |
| Timeline |
| Liberty Media Corp |
| Bankers Investment Trust |
Liberty Media and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Bankers Investment
The main advantage of trading using opposite Liberty Media and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Liberty Media vs. Hong Kong Land | Liberty Media vs. Neometals | Liberty Media vs. Coor Service Management | Liberty Media vs. Fidelity Sustainable USD |
| Bankers Investment vs. Liberty Media Corp | Bankers Investment vs. Panther Metals PLC | Bankers Investment vs. Centaur Media | Bankers Investment vs. GoldMining |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |