Correlation Between Liberty Media and American Picture
Can any of the company-specific risk be diversified away by investing in both Liberty Media and American Picture 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 American Picture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and American Picture House, you can compare the effects of market volatilities on Liberty Media and American Picture 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 American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and American Picture.
Diversification Opportunities for Liberty Media and American Picture
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and American is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House 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 are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of Liberty Media i.e., Liberty Media and American Picture go up and down completely randomly.
Pair Corralation between Liberty Media and American Picture
Assuming the 90 days horizon Liberty Media is expected to generate 3.9 times less return on investment than American Picture. But when comparing it to its historical volatility, Liberty Media is 7.19 times less risky than American Picture. It trades about 0.09 of its potential returns per unit of risk. American Picture House is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 30.00 in American Picture House on August 24, 2024 and sell it today you would lose (1.00) from holding American Picture House or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. American Picture House
Performance |
| Timeline |
| Liberty Media |
| American Picture House |
Liberty Media and American Picture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and American Picture
The main advantage of trading using opposite Liberty Media and American Picture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, American Picture 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 American Picture will offset losses from the drop in American Picture's long position.| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. Madison Square Garden | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
| American Picture vs. ZoomerMedia Limited | American Picture vs. Network Media Group | American Picture vs. New Wave Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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