Correlation Between BB Liquidating and Liberty Braves

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

By analyzing existing cross correlation between BB Liquidating B and The Liberty Braves, you can compare the effects of market volatilities on BB Liquidating and Liberty Braves 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 BB Liquidating with a short position of Liberty Braves. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Liquidating and Liberty Braves.

Diversification Opportunities for BB Liquidating and Liberty Braves

-0.26

Correlation Coefficient

BB Liquidating  Liberty Braves

Very good diversification

The 3 months correlation between BLIBQ and Liberty is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BB Liquidating B and The Liberty Braves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Braves and BB Liquidating 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 BB Liquidating B are associated (or correlated) with Liberty Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Braves has no effect on the direction of BB Liquidating i.e., BB Liquidating and Liberty Braves go up and down completely randomly.

Pair Corralation between BB Liquidating and Liberty Braves

Assuming the 90 days horizon BB Liquidating B is expected to generate 21.82 times more return on investment than Liberty Braves. However, BB Liquidating is 21.82 times more volatile than The Liberty Braves. It trades about 0.09 of its potential returns per unit of risk. The Liberty Braves is currently generating about 0.05 per unit of risk. If you would invest  0.01  in BB Liquidating B on October 11, 2024 and sell it today you would earn a total of  0.24  from holding BB Liquidating B or generate 2400.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.15%
Values	Daily Returns

BB Liquidating B  vs.  The Liberty Braves

BB Liquidating B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BB Liquidating B has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BB Liquidating is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Liberty Braves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Liberty Braves has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Liberty Braves is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BB Liquidating and Liberty Braves

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

The idea behind BB Liquidating B and The Liberty Braves 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 Transaction History module to view history of all your transactions and understand their impact on performance.