Correlation Between Luduson G and Liberty Media

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

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

Diversification Opportunities for Luduson G and Liberty Media

-0.14

Correlation Coefficient

Luduson G  Liberty Media

Good diversification

The 3 months correlation between Luduson and Liberty is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Luduson G and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Luduson G 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 Luduson G 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 Luduson G i.e., Luduson G and Liberty Media go up and down completely randomly.

Pair Corralation between Luduson G and Liberty Media

Given the investment horizon of 90 days Luduson G is expected to generate 14.21 times more return on investment than Liberty Media. However, Luduson G is 14.21 times more volatile than Liberty Media. It trades about 0.08 of its potential returns per unit of risk. Liberty Media is currently generating about 0.1 per unit of risk. If you would invest  0.46  in Luduson G on November 28, 2024 and sell it today you would lose (0.07) from holding Luduson G or give up 15.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Luduson G  vs.  Liberty Media

Luduson G

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Luduson G are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Luduson G displayed solid returns over the last few months and may actually be approaching a breakup point.

Liberty Media

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Liberty Media may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Luduson G and Liberty Media

The main advantage of trading using opposite Luduson G and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luduson G 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 Luduson G 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.