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
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Belden and Liberty is 0.86. 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 11.29 times less return on investment than Liberty Media. But when comparing it to its historical volatility, Belden Inc is 12.99 times less risky than Liberty Media. It trades about 0.05 of its potential returns per unit of risk. Liberty Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Liberty Media on August 26, 2024 and sell it today you would earn a total of 5,691 from holding Liberty Media or generate 379.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.16% |
| 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.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
| Liberty Media vs. ADTRAN Inc | Liberty Media vs. Belden Inc | Liberty Media vs. ADC Therapeutics SA | Liberty Media vs. Comtech Telecommunications 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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