Correlation Between Sinclair Broadcast and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast and Liberty Media 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 Sinclair Broadcast and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinclair Broadcast Group and Liberty Media, you can compare the effects of market volatilities on Sinclair Broadcast and Liberty Media 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 Sinclair Broadcast with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Liberty Media.
Diversification Opportunities for Sinclair Broadcast and Liberty Media
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinclair and Liberty is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Liberty Media go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Liberty Media
Given the investment horizon of 90 days Sinclair Broadcast is expected to generate 3.61 times less return on investment than Liberty Media. In addition to that, Sinclair Broadcast is 2.37 times more volatile than Liberty Media. It trades about 0.01 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.11 per unit of volatility. If you would invest 6,119 in Liberty Media on November 8, 2024 and sell it today you would earn a total of 2,679 from holding Liberty Media or generate 43.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. Liberty Media
Performance |
| Timeline |
| Sinclair Broadcast |
| Liberty Media |
Sinclair Broadcast and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Liberty Media
The main advantage of trading using opposite Sinclair Broadcast and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. Madison Square Garden | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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