Correlation Between Liberty Media and Marcus

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

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

Diversification Opportunities for Liberty Media and Marcus

0.79

Correlation Coefficient

Liberty Media  Marcus

Poor diversification

The 3 months correlation between Liberty and Marcus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Liberty Media i.e., Liberty Media and Marcus go up and down completely randomly.

Pair Corralation between Liberty Media and Marcus

Assuming the 90 days horizon Liberty Media is expected to generate 0.79 times more return on investment than Marcus. However, Liberty Media is 1.26 times less risky than Marcus. It trades about -0.04 of its potential returns per unit of risk. Marcus is currently generating about -0.16 per unit of risk. If you would invest  9,400  in Liberty Media on December 29, 2024 and sell it today you would lose (464.00) from holding Liberty Media or give up 4.94% of portfolio value over 90 days.

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

Liberty Media  vs.  Marcus

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.

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Liberty Media and Marcus

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

The idea behind Liberty Media and Marcus 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.