Correlation Between Liberty Latin and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Liberty Latin and Imax Corp 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 Latin and Imax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Latin America and Imax Corp, you can compare the effects of market volatilities on Liberty Latin and Imax Corp 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 Latin with a short position of Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Latin and Imax Corp.
Diversification Opportunities for Liberty Latin and Imax Corp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Imax is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Latin America and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp and Liberty Latin 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 Latin America are associated (or correlated) with Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Liberty Latin i.e., Liberty Latin and Imax Corp go up and down completely randomly.
Pair Corralation between Liberty Latin and Imax Corp
Assuming the 90 days horizon Liberty Latin is expected to generate 4.01 times less return on investment than Imax Corp. In addition to that, Liberty Latin is 1.25 times more volatile than Imax Corp. It trades about 0.01 of its total potential returns per unit of risk. Imax Corp is currently generating about 0.04 per unit of volatility. If you would invest 1,698 in Imax Corp on August 24, 2024 and sell it today you would earn a total of 773.00 from holding Imax Corp or generate 45.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Latin America vs. Imax Corp
Performance |
| Timeline |
| Liberty Latin America |
| Imax Corp |
Liberty Latin and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Latin and Imax Corp
The main advantage of trading using opposite Liberty Latin and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Latin position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp's long position.| Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Broadband Srs | Liberty Latin vs. Shenandoah Telecommunications Co |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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