Correlation Between Liberty Media and Maxx Sports
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Maxx Sports 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 Maxx Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Maxx Sports TV, you can compare the effects of market volatilities on Liberty Media and Maxx Sports 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 Maxx Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Maxx Sports.
Diversification Opportunities for Liberty Media and Maxx Sports
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and Maxx is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Maxx Sports TV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxx Sports TV 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 Maxx Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxx Sports TV has no effect on the direction of Liberty Media i.e., Liberty Media and Maxx Sports go up and down completely randomly.
Pair Corralation between Liberty Media and Maxx Sports
Assuming the 90 days horizon Liberty Media is expected to generate 12.64 times less return on investment than Maxx Sports. But when comparing it to its historical volatility, Liberty Media is 15.18 times less risky than Maxx Sports. It trades about 0.08 of its potential returns per unit of risk. Maxx Sports TV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Maxx Sports TV on August 24, 2024 and sell it today you would lose (7.00) from holding Maxx Sports TV or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Liberty Media vs. Maxx Sports TV
Performance |
| Timeline |
| Liberty Media |
| Maxx Sports TV |
Liberty Media and Maxx Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Maxx Sports
The main advantage of trading using opposite Liberty Media and Maxx Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Maxx Sports 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 Maxx Sports will offset losses from the drop in Maxx Sports' long position.| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A | Liberty Media vs. Atlanta Braves Holdings, |
| Maxx Sports vs. ZoomerMedia Limited | Maxx Sports vs. Network Media Group | Maxx Sports 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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