Correlation Between Saga Communications and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Saga Communications 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 Saga Communications and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Communications and Liberty Media, you can compare the effects of market volatilities on Saga Communications 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 Saga Communications with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Communications and Liberty Media.
Diversification Opportunities for Saga Communications and Liberty Media
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saga and Liberty is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Saga Communications and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Saga Communications 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 Saga Communications 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 Saga Communications i.e., Saga Communications and Liberty Media go up and down completely randomly.
Pair Corralation between Saga Communications and Liberty Media
Considering the 90-day investment horizon Saga Communications is expected to under-perform the Liberty Media. But the stock apears to be less risky and, when comparing its historical volatility, Saga Communications is 1.02 times less risky than Liberty Media. The stock trades about -0.13 of its potential returns per unit of risk. The Liberty Media is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 3,036 in Liberty Media on August 28, 2024 and sell it today you would lose (807.00) from holding Liberty Media or give up 26.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.16% |
| Values | Daily Returns |
Saga Communications vs. Liberty Media
Performance |
| Timeline |
| Saga Communications |
| Liberty Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Saga Communications and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Communications and Liberty Media
The main advantage of trading using opposite Saga Communications and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Communications 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.| Saga Communications vs. Walt Disney | Saga Communications vs. Roku Inc | Saga Communications vs. Netflix | Saga Communications vs. AMC Entertainment Holdings |
| Liberty Media vs. E W Scripps | Liberty Media vs. Gray Television | Liberty Media vs. Cumulus Media Class | Liberty Media vs. Beasley Broadcast Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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