Correlation Between Marcus and Liberty Media

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

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

Diversification Opportunities for Marcus and Liberty Media

0.79

Correlation Coefficient

Marcus  Liberty Media

Poor diversification

The 3 months correlation between Marcus and Liberty is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Marcus 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 Marcus 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 Marcus i.e., Marcus and Liberty Media go up and down completely randomly.

Pair Corralation between Marcus and Liberty Media

Considering the 90-day investment horizon Marcus is expected to under-perform the Liberty Media. In addition to that, Marcus is 1.26 times more volatile than Liberty Media. It trades about -0.16 of its total potential returns per unit of risk. Liberty Media is currently generating about -0.04 per unit of volatility. 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

Marcus  vs.  Liberty Media

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.

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.

Pair Trading with Marcus and Liberty Media

The main advantage of trading using opposite Marcus and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus 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 Marcus 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.