Correlation Between Liberty Media and News Corp
Can any of the company-specific risk be diversified away by investing in both Liberty Media and News Corp 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 News Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and News Corp B, you can compare the effects of market volatilities on Liberty Media and News Corp 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 News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and News Corp.
Diversification Opportunities for Liberty Media and News Corp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and News is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and News Corp B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp B 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp B has no effect on the direction of Liberty Media i.e., Liberty Media and News Corp go up and down completely randomly.
Pair Corralation between Liberty Media and News Corp
Assuming the 90 days horizon Liberty Media is expected to generate 1.11 times more return on investment than News Corp. However, Liberty Media is 1.11 times more volatile than News Corp B. It trades about 0.09 of its potential returns per unit of risk. News Corp B is currently generating about 0.1 per unit of risk. If you would invest 7,231 in Liberty Media on August 24, 2024 and sell it today you would earn a total of 1,282 from holding Liberty Media or generate 17.73% 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. News Corp B
Performance |
| Timeline |
| Liberty Media |
| News Corp B |
Liberty Media and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and News Corp
The main advantage of trading using opposite Liberty Media and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, News Corp 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 News Corp will offset losses from the drop in News Corp's 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, |
| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
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.
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