Correlation Between Liberty Media and Bolloré SE
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Bolloré SE 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 Bolloré SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Bollor SE, you can compare the effects of market volatilities on Liberty Media and Bolloré SE 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 Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Bolloré SE.
Diversification Opportunities for Liberty Media and Bolloré SE
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Bolloré is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE 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 Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Liberty Media i.e., Liberty Media and Bolloré SE go up and down completely randomly.
Pair Corralation between Liberty Media and Bolloré SE
Assuming the 90 days horizon Liberty Media is expected to generate 1.02 times more return on investment than Bolloré SE. However, Liberty Media is 1.02 times more volatile than Bollor SE. It trades about 0.03 of its potential returns per unit of risk. Bollor SE is currently generating about 0.01 per unit of risk. If you would invest 6,355 in Liberty Media on December 11, 2024 and sell it today you would earn a total of 1,441 from holding Liberty Media or generate 22.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Liberty Media vs. Bollor SE
Performance |
| Timeline |
| Liberty Media |
| Bolloré SE |
Liberty Media and Bolloré SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Bolloré SE
The main advantage of trading using opposite Liberty Media and Bolloré SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Bolloré SE 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 Bolloré SE will offset losses from the drop in Bolloré SE's long position.| Liberty Media vs. Atlanta Braves Holdings, | ||
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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