Correlation Between Interpublic Group and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Interpublic Group 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 Interpublic Group and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interpublic Group of and Liberty Media, you can compare the effects of market volatilities on Interpublic Group 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 Interpublic Group with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Liberty Media.
Diversification Opportunities for Interpublic Group and Liberty Media
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interpublic and Liberty is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Interpublic Group 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 Interpublic Group of 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 Interpublic Group i.e., Interpublic Group and Liberty Media go up and down completely randomly.
Pair Corralation between Interpublic Group and Liberty Media
Considering the 90-day investment horizon Interpublic Group is expected to generate 354.97 times less return on investment than Liberty Media. But when comparing it to its historical volatility, Interpublic Group of is 29.19 times less risky than Liberty Media. It trades about 0.0 of its potential returns per unit of risk. Liberty Media is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Liberty Media on August 27, 2024 and sell it today you would earn a total of 6,696 from holding Liberty Media or generate 1913.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.35% |
| Values | Daily Returns |
Interpublic Group of vs. Liberty Media
Performance |
| Timeline |
| Interpublic Group |
| Liberty Media |
Interpublic Group and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Liberty Media
The main advantage of trading using opposite Interpublic Group and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group 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.| Interpublic Group vs. Ziff Davis | Interpublic Group vs. Criteo Sa | Interpublic Group vs. WPP PLC ADR | Interpublic Group vs. Integral Ad Science |
| Liberty Media vs. AMREP | Liberty Media vs. Scholastic | Liberty Media vs. Peoples Educational Holdings | Liberty Media vs. Relx PLC ADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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