Correlation Between Liberty Media and JGC Corp
Can any of the company-specific risk be diversified away by investing in both Liberty Media and JGC 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 JGC 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 JGC Corp, you can compare the effects of market volatilities on Liberty Media and JGC 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 JGC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and JGC Corp.
Diversification Opportunities for Liberty Media and JGC Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and JGC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and JGC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGC 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 JGC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGC Corp has no effect on the direction of Liberty Media i.e., Liberty Media and JGC Corp go up and down completely randomly.
Pair Corralation between Liberty Media and JGC Corp
Assuming the 90 days horizon Liberty Media is expected to generate 13.52 times more return on investment than JGC Corp. However, Liberty Media is 13.52 times more volatile than JGC Corp. It trades about 0.06 of its potential returns per unit of risk. JGC Corp is currently generating about -0.03 per unit of risk. If you would invest 490.00 in Liberty Media on August 28, 2024 and sell it today you would earn a total of 6,739 from holding Liberty Media or generate 1375.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
Liberty Media vs. JGC Corp
Performance |
| Timeline |
| Liberty Media |
| JGC Corp |
Liberty Media and JGC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and JGC Corp
The main advantage of trading using opposite Liberty Media and JGC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, JGC 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 JGC Corp will offset losses from the drop in JGC Corp's long position.| Liberty Media vs. Compania Cervecerias Unidas | Liberty Media vs. Supercom | Liberty Media vs. Anheuser Busch Inbev | Liberty Media vs. Jacobs Solutions |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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