Correlation Between ADC Therapeutics and Liberty Media
Can any of the company-specific risk be diversified away by investing in both ADC Therapeutics and Liberty Media 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 ADC Therapeutics and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADC Therapeutics SA and Liberty Media, you can compare the effects of market volatilities on ADC Therapeutics and Liberty Media 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 ADC Therapeutics with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADC Therapeutics and Liberty Media.
Diversification Opportunities for ADC Therapeutics and Liberty Media
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ADC and Liberty is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and ADC Therapeutics 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 ADC Therapeutics SA are associated (or correlated) with Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and Liberty Media go up and down completely randomly.
Pair Corralation between ADC Therapeutics and Liberty Media
Given the investment horizon of 90 days ADC Therapeutics SA is expected to under-perform the Liberty Media. In addition to that, ADC Therapeutics is 1.87 times more volatile than Liberty Media. It trades about -0.25 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.37 per unit of volatility. If you would invest 5,921 in Liberty Media on August 29, 2024 and sell it today you would earn a total of 1,396 from holding Liberty Media or generate 23.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADC Therapeutics SA vs. Liberty Media
Performance |
| Timeline |
| ADC Therapeutics |
| Liberty Media |
ADC Therapeutics and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADC Therapeutics and Liberty Media
The main advantage of trading using opposite ADC Therapeutics and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADC Therapeutics position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century Therapeutics |
| Liberty Media vs. Imax Corp | Liberty Media vs. Liberty Media | Liberty Media vs. Liberty Media | Liberty Media vs. Hall of Fame |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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