Correlation Between Liberty Global and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Liberty Global 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 Liberty Global and Liberty Media 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 Liberty Media, you can compare the effects of market volatilities on Liberty Global 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 Liberty Global with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and Liberty Media.
Diversification Opportunities for Liberty Global and Liberty Media
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Liberty is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 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 Liberty Global i.e., Liberty Global and Liberty Media go up and down completely randomly.
Pair Corralation between Liberty Global and Liberty Media
If you would invest 2,251 in Liberty Media on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Liberty Media or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Liberty Global PLC vs. Liberty Media
Performance |
| Timeline |
| Liberty Global PLC |
| Liberty Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liberty Global and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Global and Liberty Media
The main advantage of trading using opposite Liberty Global and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Global 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.| Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Broadband Srs |
| Liberty Media vs. E W Scripps | Liberty Media vs. Gray Television | Liberty Media vs. Saga Communications | Liberty Media vs. Cumulus Media Class |
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 Stocks Directory module to find actively traded stocks across global markets.
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