Correlation Between Liberty Media and Tegna
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Tegna 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 Tegna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Tegna Inc, you can compare the effects of market volatilities on Liberty Media and Tegna 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 Tegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Tegna.
Diversification Opportunities for Liberty Media and Tegna
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and Tegna is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Tegna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tegna Inc 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 Tegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tegna Inc has no effect on the direction of Liberty Media i.e., Liberty Media and Tegna go up and down completely randomly.
Pair Corralation between Liberty Media and Tegna
Assuming the 90 days horizon Liberty Media is expected to generate 1.62 times less return on investment than Tegna. But when comparing it to its historical volatility, Liberty Media is 1.56 times less risky than Tegna. It trades about 0.17 of its potential returns per unit of risk. Tegna Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,655 in Tegna Inc on August 30, 2024 and sell it today you would earn a total of 210.00 from holding Tegna Inc or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Tegna Inc
Performance |
| Timeline |
| Liberty Media |
| Tegna Inc |
Liberty Media and Tegna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Tegna
The main advantage of trading using opposite Liberty Media and Tegna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Tegna 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 Tegna will offset losses from the drop in Tegna's long position.| Liberty Media vs. Liberty Media | Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
| Tegna vs. News Corp B | Tegna vs. News Corp A | Tegna vs. Live Nation Entertainment | Tegna vs. Paramount Global Class |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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