Correlation Between Gray Television and Liberty Global
Can any of the company-specific risk be diversified away by investing in both Gray Television and Liberty Global 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 Gray Television and Liberty Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gray Television and Liberty Global PLC, you can compare the effects of market volatilities on Gray Television and Liberty Global 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 Gray Television with a short position of Liberty Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and Liberty Global.
Diversification Opportunities for Gray Television and Liberty Global
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gray and Liberty is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and Liberty Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Global PLC and Gray Television 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 Gray Television are associated (or correlated) with Liberty Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Global PLC has no effect on the direction of Gray Television i.e., Gray Television and Liberty Global go up and down completely randomly.
Pair Corralation between Gray Television and Liberty Global
Assuming the 90 days horizon Gray Television is expected to generate 1.56 times more return on investment than Liberty Global. However, Gray Television is 1.56 times more volatile than Liberty Global PLC. It trades about 0.01 of its potential returns per unit of risk. Liberty Global PLC is currently generating about 0.0 per unit of risk. If you would invest 1,044 in Gray Television on August 28, 2024 and sell it today you would lose (317.00) from holding Gray Television or give up 30.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gray Television vs. Liberty Global PLC
Performance |
| Timeline |
| Gray Television |
| Liberty Global PLC |
Gray Television and Liberty Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gray Television and Liberty Global
The main advantage of trading using opposite Gray Television and Liberty Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television position performs unexpectedly, Liberty Global 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 Global will offset losses from the drop in Liberty Global's long position.| Gray Television vs. Liberty Global PLC | Gray Television vs. Gray Television | Gray Television vs. Greif Inc |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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