Correlation Between Bankers Investment and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Liberty Media Corp, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Liberty Media.
Diversification Opportunities for Bankers Investment and Liberty Media
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bankers and Liberty is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp and Bankers Investment 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 Bankers Investment Trust 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 Corp has no effect on the direction of Bankers Investment i.e., Bankers Investment and Liberty Media go up and down completely randomly.
Pair Corralation between Bankers Investment and Liberty Media
Assuming the 90 days trading horizon Bankers Investment is expected to generate 3.55 times less return on investment than Liberty Media. But when comparing it to its historical volatility, Bankers Investment Trust is 2.59 times less risky than Liberty Media. It trades about 0.04 of its potential returns per unit of risk. Liberty Media Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,257 in Liberty Media Corp on September 20, 2024 and sell it today you would earn a total of 3,369 from holding Liberty Media Corp or generate 64.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Liberty Media Corp
Performance |
| Timeline |
| Bankers Investment Trust |
| Liberty Media Corp |
Bankers Investment and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Liberty Media
The main advantage of trading using opposite Bankers Investment and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
| Liberty Media vs. Monks Investment Trust | Liberty Media vs. Bankers Investment Trust | Liberty Media vs. Smithson Investment Trust | Liberty Media vs. Taylor Maritime Investments |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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