Correlation Between Belden and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Belden 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 Belden and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and Liberty Media, you can compare the effects of market volatilities on Belden 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 Belden with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and Liberty Media.
Diversification Opportunities for Belden and Liberty Media
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Belden and Liberty is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Belden 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 Belden Inc 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 Belden i.e., Belden and Liberty Media go up and down completely randomly.
Pair Corralation between Belden and Liberty Media
Considering the 90-day investment horizon Belden is expected to generate 1.94 times less return on investment than Liberty Media. In addition to that, Belden is 1.29 times more volatile than Liberty Media. It trades about 0.07 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.17 per unit of volatility. If you would invest 7,153 in Liberty Media on August 30, 2024 and sell it today you would earn a total of 956.00 from holding Liberty Media or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Belden Inc vs. Liberty Media
Performance |
| Timeline |
| Belden Inc |
| Liberty Media |
Belden and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and Liberty Media
The main advantage of trading using opposite Belden and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden 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.The idea behind Belden Inc and Liberty Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Liberty Media vs. Liberty Media | Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
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.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |