Correlation Between Liberty Media and Gannett
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Gannett 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 Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Gannett Co, you can compare the effects of market volatilities on Liberty Media and Gannett 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 Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Gannett.
Diversification Opportunities for Liberty Media and Gannett
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liberty and Gannett is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett 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 are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Liberty Media i.e., Liberty Media and Gannett go up and down completely randomly.
Pair Corralation between Liberty Media and Gannett
Assuming the 90 days horizon Liberty Media is expected to generate 0.71 times more return on investment than Gannett. However, Liberty Media is 1.4 times less risky than Gannett. It trades about 0.33 of its potential returns per unit of risk. Gannett Co is currently generating about -0.04 per unit of risk. If you would invest 7,399 in Liberty Media on September 8, 2024 and sell it today you would earn a total of 1,101 from holding Liberty Media or generate 14.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Liberty Media vs. Gannett Co
Performance |
Timeline |
Liberty Media |
Gannett |
Liberty Media and Gannett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liberty Media and Gannett
The main advantage of trading using opposite Liberty Media and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's long position.Liberty Media vs. Liberty Media | Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
Gannett vs. Liberty Media | Gannett vs. Atlanta Braves Holdings, | Gannett vs. News Corp B | Gannett 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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