Correlation Between John Wiley and Liberty Media

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

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

Diversification Opportunities for John Wiley and Liberty Media

-0.56

Correlation Coefficient

John Wiley  Liberty Media

Excellent diversification

The 3 months correlation between John and Liberty is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and John Wiley 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 John Wiley Sons 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 John Wiley i.e., John Wiley and Liberty Media go up and down completely randomly.

Pair Corralation between John Wiley and Liberty Media

Given the investment horizon of 90 days John Wiley Sons is expected to generate 0.63 times more return on investment than Liberty Media. However, John Wiley Sons is 1.59 times less risky than Liberty Media. It trades about -0.07 of its potential returns per unit of risk. Liberty Media is currently generating about -0.11 per unit of risk. If you would invest  3,990  in John Wiley Sons on December 4, 2024 and sell it today you would lose (90.00) from holding John Wiley Sons or give up 2.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

John Wiley Sons  vs.  Liberty Media

John Wiley Sons

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Wiley Sons 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Liberty Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 John Wiley and Liberty Media

The main advantage of trading using opposite John Wiley and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wiley 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 John Wiley Sons 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.