Correlation Between E W and Liberty Media

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

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

Diversification Opportunities for E W and Liberty Media

-0.07

Correlation Coefficient

E W  Liberty Media

Good diversification

The 3 months correlation between SSP and Liberty is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding E W Scripps and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and E W 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 E W Scripps 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 E W i.e., E W and Liberty Media go up and down completely randomly.

Pair Corralation between E W and Liberty Media

Considering the 90-day investment horizon E W Scripps is expected to generate 9.23 times more return on investment than Liberty Media. However, E W is 9.23 times more volatile than Liberty Media. It trades about 0.06 of its potential returns per unit of risk. Liberty Media is currently generating about -0.88 per unit of risk. If you would invest  187.00  in E W Scripps on September 3, 2024 and sell it today you would earn a total of  16.00  from holding E W Scripps or generate 8.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.94%
Values	Daily Returns

E W Scripps  vs.  Liberty Media

E W Scripps

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in E W Scripps are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, E W reported solid returns over the last few months and may actually be approaching a breakup point.

Liberty Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with E W and Liberty Media

The main advantage of trading using opposite E W and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E W 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 E W Scripps 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.