Correlation Between IHeartMedia and Liberty Media
Can any of the company-specific risk be diversified away by investing in both IHeartMedia 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 IHeartMedia and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iHeartMedia Class A and Liberty Media, you can compare the effects of market volatilities on IHeartMedia 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 IHeartMedia with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and Liberty Media.
Diversification Opportunities for IHeartMedia and Liberty Media
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IHeartMedia and Liberty is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia Class A and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and IHeartMedia 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 iHeartMedia Class A 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 IHeartMedia i.e., IHeartMedia and Liberty Media go up and down completely randomly.
Pair Corralation between IHeartMedia and Liberty Media
If you would invest 189.00 in iHeartMedia Class A on August 28, 2024 and sell it today you would earn a total of 41.00 from holding iHeartMedia Class A or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
iHeartMedia Class A vs. Liberty Media
Performance |
| Timeline |
| iHeartMedia Class |
| Liberty Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IHeartMedia and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHeartMedia and Liberty Media
The main advantage of trading using opposite IHeartMedia and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHeartMedia 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.| IHeartMedia vs. Beasley Broadcast Group | IHeartMedia vs. Saga Communications | IHeartMedia vs. E W Scripps | IHeartMedia vs. Gray Television |
| Liberty Media vs. E W Scripps | Liberty Media vs. Gray Television | Liberty Media vs. Cumulus Media Class | Liberty Media vs. Beasley Broadcast Group |
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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