Correlation Between Liberty Media and Intuitive Investments

Can any of the company-specific risk be diversified away by investing in both Liberty Media and Intuitive Investments 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 Intuitive Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liberty Media Corp and Intuitive Investments Group, you can compare the effects of market volatilities on Liberty Media and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Intuitive Investments.

Diversification Opportunities for Liberty Media and Intuitive Investments

-0.8

Correlation Coefficient

Liberty Media  Intuitive Investments

Pay attention - limited upside

The 3 months correlation between Liberty and Intuitive is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media Corp and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Corp are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Liberty Media i.e., Liberty Media and Intuitive Investments go up and down completely randomly.

Pair Corralation between Liberty Media and Intuitive Investments

Assuming the 90 days trading horizon Liberty Media Corp is expected to generate 1.33 times more return on investment than Intuitive Investments. However, Liberty Media is 1.33 times more volatile than Intuitive Investments Group. It trades about 0.2 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.3 per unit of risk. If you would invest  7,454  in Liberty Media Corp on September 27, 2024 and sell it today you would earn a total of  1,112  from holding Liberty Media Corp or generate 14.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Liberty Media Corp  vs.  Intuitive Investments Group

Liberty Media Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Liberty Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Liberty Media and Intuitive Investments

The main advantage of trading using opposite Liberty Media and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.

The idea behind Liberty Media Corp and Intuitive Investments Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.