Correlation Between Liberty Media and Cable One
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Cable One 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 Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Cable One, you can compare the effects of market volatilities on Liberty Media and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Cable One.
Diversification Opportunities for Liberty Media and Cable One
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Cable is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Liberty Media i.e., Liberty Media and Cable One go up and down completely randomly.
Pair Corralation between Liberty Media and Cable One
Assuming the 90 days horizon Liberty Media is expected to generate 0.52 times more return on investment than Cable One. However, Liberty Media is 1.93 times less risky than Cable One. It trades about 0.09 of its potential returns per unit of risk. Cable One is currently generating about -0.02 per unit of risk. If you would invest 5,733 in Liberty Media on August 26, 2024 and sell it today you would earn a total of 2,012 from holding Liberty Media or generate 35.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Cable One
Performance |
| Timeline |
| Liberty Media |
| Cable One |
Liberty Media and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Cable One
The main advantage of trading using opposite Liberty Media and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Liberty Media vs. ADTRAN Inc | Liberty Media vs. Belden Inc | Liberty Media vs. ADC Therapeutics SA | Liberty Media vs. Comtech Telecommunications Corp |
| Cable One vs. Liberty Global PLC | Cable One vs. Liberty Global PLC | Cable One vs. Liberty Broadband Srs | Cable One vs. Shenandoah Telecommunications Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |