Correlation Between Gannett and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Gannett and Liberty Media 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 Gannett and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gannett Co and Liberty Media, you can compare the effects of market volatilities on Gannett and Liberty Media 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 Gannett with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gannett and Liberty Media.
Diversification Opportunities for Gannett and Liberty Media
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gannett and Liberty is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gannett Co and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Gannett 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 Gannett Co are associated (or correlated) with Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of Gannett i.e., Gannett and Liberty Media go up and down completely randomly.
Pair Corralation between Gannett and Liberty Media
Considering the 90-day investment horizon Gannett is expected to generate 24.27 times less return on investment than Liberty Media. In addition to that, Gannett is 1.2 times more volatile than Liberty Media. It trades about 0.01 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.31 per unit of volatility. If you would invest 8,096 in Liberty Media on September 13, 2024 and sell it today you would earn a total of 1,280 from holding Liberty Media or generate 15.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gannett Co vs. Liberty Media
Performance |
| Timeline |
| Gannett |
| Liberty Media |
Gannett and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gannett and Liberty Media
The main advantage of trading using opposite Gannett and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gannett position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| Gannett vs. Dallasnews Corp | Gannett vs. Scholastic | Gannett vs. Pearson PLC ADR | Gannett vs. New York Times |
| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A | Liberty Media vs. Atlanta Braves 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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