Correlation Between Brera Holdings and Liberty Media

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

By analyzing existing cross correlation between Brera Holdings PLC and Liberty Media, you can compare the effects of market volatilities on Brera Holdings 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 Brera Holdings with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brera Holdings and Liberty Media.

Diversification Opportunities for Brera Holdings and Liberty Media

-0.25

Correlation Coefficient

Brera Holdings  Liberty Media

Very good diversification

The 3 months correlation between Brera and Liberty is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Brera Holdings PLC and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Brera Holdings 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 Brera Holdings PLC 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 Brera Holdings i.e., Brera Holdings and Liberty Media go up and down completely randomly.

Pair Corralation between Brera Holdings and Liberty Media

Given the investment horizon of 90 days Brera Holdings PLC is expected to generate 4.86 times more return on investment than Liberty Media. However, Brera Holdings is 4.86 times more volatile than Liberty Media. It trades about 0.02 of its potential returns per unit of risk. Liberty Media is currently generating about -0.04 per unit of risk. If you would invest  74.00  in Brera Holdings PLC on December 28, 2024 and sell it today you would lose (6.02) from holding Brera Holdings PLC or give up 8.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Brera Holdings PLC  vs.  Liberty Media

Brera Holdings PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brera Holdings PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Brera Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Liberty Media

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Brera Holdings and Liberty Media

The main advantage of trading using opposite Brera Holdings and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brera Holdings 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.

The idea behind Brera Holdings PLC and Liberty Media 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.