Correlation Between Liberty Latin and Marcus
Can any of the company-specific risk be diversified away by investing in both Liberty Latin and Marcus 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 Marcus 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 Marcus, you can compare the effects of market volatilities on Liberty Latin and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Latin and Marcus.
Diversification Opportunities for Liberty Latin and Marcus
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Marcus is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Latin America and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Liberty Latin i.e., Liberty Latin and Marcus go up and down completely randomly.
Pair Corralation between Liberty Latin and Marcus
Assuming the 90 days horizon Liberty Latin America is expected to under-perform the Marcus. In addition to that, Liberty Latin is 1.7 times more volatile than Marcus. It trades about -0.26 of its total potential returns per unit of risk. Marcus is currently generating about 0.43 per unit of volatility. If you would invest 1,681 in Marcus on August 27, 2024 and sell it today you would earn a total of 522.00 from holding Marcus or generate 31.05% 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. Marcus
Performance |
| Timeline |
| Liberty Latin America |
| Marcus |
Liberty Latin and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Latin and Marcus
The main advantage of trading using opposite Liberty Latin and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Latin position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' 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 |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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