Correlation Between Liberty Media and HUYA
Can any of the company-specific risk be diversified away by investing in both Liberty Media and HUYA 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 HUYA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and HUYA Inc, you can compare the effects of market volatilities on Liberty Media and HUYA 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 HUYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and HUYA.
Diversification Opportunities for Liberty Media and HUYA
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and HUYA is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and HUYA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUYA Inc 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 HUYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUYA Inc has no effect on the direction of Liberty Media i.e., Liberty Media and HUYA go up and down completely randomly.
Pair Corralation between Liberty Media and HUYA
Assuming the 90 days horizon Liberty Media is expected to generate 0.49 times more return on investment than HUYA. However, Liberty Media is 2.06 times less risky than HUYA. It trades about 0.41 of its potential returns per unit of risk. HUYA Inc is currently generating about -0.18 per unit of risk. If you would invest 5,192 in Liberty Media on September 3, 2024 and sell it today you would earn a total of 2,110 from holding Liberty Media or generate 40.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. HUYA Inc
Performance |
| Timeline |
| Liberty Media |
| HUYA Inc |
Liberty Media and HUYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and HUYA
The main advantage of trading using opposite Liberty Media and HUYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, HUYA 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 HUYA will offset losses from the drop in HUYA's long position.| Liberty Media vs. HUYA Inc | Liberty Media vs. Reservoir Media Management | Liberty Media vs. Liberty Media | Liberty Media vs. Liberty Media |
| HUYA vs. Roku Inc | HUYA vs. Paramount Global Class | HUYA vs. Manchester United | HUYA vs. Warner Bros Discovery |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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