Correlation Between Liberty Media and Saga Communications
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Saga Communications 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 Media and Saga Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Saga Communications, you can compare the effects of market volatilities on Liberty Media and Saga Communications 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 Media with a short position of Saga Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Saga Communications.
Diversification Opportunities for Liberty Media and Saga Communications
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liberty and Saga is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications and Liberty Media 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 Media are associated (or correlated) with Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of Liberty Media i.e., Liberty Media and Saga Communications go up and down completely randomly.
Pair Corralation between Liberty Media and Saga Communications
Assuming the 90 days horizon Liberty Media is expected to generate 22.89 times more return on investment than Saga Communications. However, Liberty Media is 22.89 times more volatile than Saga Communications. It trades about 0.05 of its potential returns per unit of risk. Saga Communications is currently generating about -0.03 per unit of risk. 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 |
Liberty Media vs. Saga Communications
Performance |
| Timeline |
| Liberty Media |
| Saga Communications |
Liberty Media and Saga Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Saga Communications
The main advantage of trading using opposite Liberty Media and Saga Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Saga Communications 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 Saga Communications will offset losses from the drop in Saga Communications' long position.| Liberty Media vs. AMREP | Liberty Media vs. Scholastic | Liberty Media vs. Peoples Educational Holdings | Liberty Media vs. Relx PLC ADR |
| Saga Communications vs. iHeartMedia Class A | Saga Communications vs. Beasley Broadcast Group | Saga Communications vs. Cumulus Media Class | Saga Communications vs. Mediaco Holding |
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.
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