Correlation Between Lee Enterprises and Liberty Latin

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

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

Diversification Opportunities for Lee Enterprises and Liberty Latin

-0.45

Correlation Coefficient

Lee Enterprises  Liberty Latin

Very good diversification

The 3 months correlation between Lee and Liberty is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lee Enterprises Incorporated and Liberty Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Latin America and Lee Enterprises 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 Lee Enterprises Incorporated are associated (or correlated) with Liberty Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Latin America has no effect on the direction of Lee Enterprises i.e., Lee Enterprises and Liberty Latin go up and down completely randomly.

Pair Corralation between Lee Enterprises and Liberty Latin

Considering the 90-day investment horizon Lee Enterprises Incorporated is expected to under-perform the Liberty Latin. In addition to that, Lee Enterprises is 1.7 times more volatile than Liberty Latin America. It trades about -0.11 of its total potential returns per unit of risk. Liberty Latin America is currently generating about 0.06 per unit of volatility. If you would invest  623.00  in Liberty Latin America on December 28, 2024 and sell it today you would earn a total of  48.00  from holding Liberty Latin America or generate 7.7% return on investment over 90 days.

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

Lee Enterprises Incorporated  vs.  Liberty Latin America

Lee Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lee Enterprises Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Liberty Latin America

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Latin America are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Liberty Latin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lee Enterprises and Liberty Latin

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

The idea behind Lee Enterprises Incorporated and Liberty Latin America 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.