Correlation Between Liberty Media and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Liberty Media 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 Media 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 Media and Imax Corp, you can compare the effects of market volatilities on Liberty Media 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 Media with a short position of Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Imax Corp.
Diversification Opportunities for Liberty Media and Imax Corp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Imax is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 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 Media i.e., Liberty Media and Imax Corp go up and down completely randomly.
Pair Corralation between Liberty Media and Imax Corp
Assuming the 90 days horizon Liberty Media is expected to generate 0.81 times more return on investment than Imax Corp. However, Liberty Media is 1.23 times less risky than Imax Corp. It trades about 0.28 of its potential returns per unit of risk. Imax Corp is currently generating about 0.18 per unit of risk. If you would invest 3,845 in Liberty Media on September 1, 2024 and sell it today you would earn a total of 3,457 from holding Liberty Media or generate 89.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Imax Corp
Performance |
| Timeline |
| Liberty Media |
| Imax Corp |
Liberty Media and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Imax Corp
The main advantage of trading using opposite Liberty Media and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media 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 Media vs. Stepstone Group | Liberty Media vs. Morgan Stanley | Liberty Media vs. SEI Investments | Liberty Media vs. Artisan Partners Asset |
| Imax Corp vs. ADTRAN Inc | Imax Corp vs. Belden Inc | Imax Corp vs. ADC Therapeutics SA | Imax Corp vs. Comtech Telecommunications Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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