Correlation Between Liberty Media and Kajima Corp
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Kajima 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 Kajima 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 Kajima Corp ADR, you can compare the effects of market volatilities on Liberty Media and Kajima 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 Kajima Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Kajima Corp.
Diversification Opportunities for Liberty Media and Kajima Corp
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Kajima is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Kajima Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kajima Corp ADR 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 Kajima Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kajima Corp ADR has no effect on the direction of Liberty Media i.e., Liberty Media and Kajima Corp go up and down completely randomly.
Pair Corralation between Liberty Media and Kajima Corp
Assuming the 90 days horizon Liberty Media is expected to generate 1.0 times more return on investment than Kajima Corp. However, Liberty Media is 1.0 times less risky than Kajima Corp. It trades about 0.37 of its potential returns per unit of risk. Kajima Corp ADR is currently generating about -0.09 per unit of risk. If you would invest 5,921 in Liberty Media on August 28, 2024 and sell it today you would earn a total of 1,308 from holding Liberty Media or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Kajima Corp ADR
Performance |
| Timeline |
| Liberty Media |
| Kajima Corp ADR |
Liberty Media and Kajima Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Kajima Corp
The main advantage of trading using opposite Liberty Media and Kajima Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Kajima 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 Kajima Corp will offset losses from the drop in Kajima Corp's long position.| Liberty Media vs. ADTRAN Inc | Liberty Media vs. Belden Inc | Liberty Media vs. ADC Therapeutics SA | Liberty Media vs. Comtech Telecommunications Corp |
| Kajima Corp vs. Aecom Technology | Kajima Corp vs. Matrix Service Co | Kajima Corp vs. MYR Group | Kajima Corp vs. Fluor |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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