Correlation Between Liberty Media and Scienjoy Holding

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

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

Diversification Opportunities for Liberty Media and Scienjoy Holding

0.1

Correlation Coefficient

Liberty Media  Scienjoy Holding

Average diversification

The 3 months correlation between Liberty and Scienjoy is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Scienjoy Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scienjoy Holding Corp 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 Scienjoy Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scienjoy Holding Corp has no effect on the direction of Liberty Media i.e., Liberty Media and Scienjoy Holding go up and down completely randomly.

Pair Corralation between Liberty Media and Scienjoy Holding

Assuming the 90 days horizon Liberty Media is expected to under-perform the Scienjoy Holding. But the stock apears to be less risky and, when comparing its historical volatility, Liberty Media is 2.77 times less risky than Scienjoy Holding. The stock trades about -0.05 of its potential returns per unit of risk. The Scienjoy Holding Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Scienjoy Holding Corp on December 28, 2024 and sell it today you would lose (8.00) from holding Scienjoy Holding Corp or give up 8.0% of portfolio value over 90 days.

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

Liberty Media  vs.  Scienjoy Holding Corp

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.

Scienjoy Holding Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Scienjoy Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking indicators, Scienjoy Holding is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Liberty Media and Scienjoy Holding

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

The idea behind Liberty Media and Scienjoy Holding Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.