Correlation Between Liberty Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Liberty Global and Dow Jones 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 Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Global PLC and Dow Jones Industrial, you can compare the effects of market volatilities on Liberty Global and Dow Jones 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and Dow Jones.
Diversification Opportunities for Liberty Global and Dow Jones
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Liberty Global 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 Global PLC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Liberty Global i.e., Liberty Global and Dow Jones go up and down completely randomly.
Pair Corralation between Liberty Global and Dow Jones
Assuming the 90 days horizon Liberty Global PLC is expected to under-perform the Dow Jones. In addition to that, Liberty Global is 9.86 times more volatile than Dow Jones Industrial. It trades about -0.13 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of volatility. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Global PLC vs. Dow Jones Industrial
Performance |
| Timeline |
Liberty Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Liberty Global PLC
Pair trading matchups for Liberty Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Liberty Global and Dow Jones
The main advantage of trading using opposite Liberty Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Global position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Broadband Srs |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |