Correlation Between Liberty Media and Energy
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Energy 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 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Energy and Water, you can compare the effects of market volatilities on Liberty Media and Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Energy.
Diversification Opportunities for Liberty Media and Energy
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liberty and Energy is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Energy and Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy and Water 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy and Water has no effect on the direction of Liberty Media i.e., Liberty Media and Energy go up and down completely randomly.
Pair Corralation between Liberty Media and Energy
Assuming the 90 days horizon Liberty Media is expected to generate 0.18 times more return on investment than Energy. However, Liberty Media is 5.6 times less risky than Energy. It trades about 0.37 of its potential returns per unit of risk. Energy and Water is currently generating about -0.12 per unit of risk. If you would invest 5,925 in Liberty Media on August 30, 2024 and sell it today you would earn a total of 1,392 from holding Liberty Media or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Liberty Media vs. Energy and Water
Performance |
| Timeline |
| Liberty Media |
| Energy and Water |
Liberty Media and Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Energy
The main advantage of trading using opposite Liberty Media and Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Energy 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 Energy will offset losses from the drop in Energy's long position.| Liberty Media vs. Playtech plc | Liberty Media vs. Kite Realty Group | Liberty Media vs. Mattel Inc | Liberty Media vs. PennantPark Floating Rate |
| Energy vs. Vow ASA | Energy vs. Eestech | Energy vs. One World Universe | Energy vs. Bion Environmental Technologies |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |