Correlation Between Zinc Media and Liberty Media

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

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

Diversification Opportunities for Zinc Media and Liberty Media

-0.85

Correlation Coefficient

Zinc Media  Liberty Media

Pay attention - limited upside

The 3 months correlation between Zinc and Liberty is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp and Zinc Media 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 Zinc Media Group 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 Corp has no effect on the direction of Zinc Media i.e., Zinc Media and Liberty Media go up and down completely randomly.

Pair Corralation between Zinc Media and Liberty Media

Assuming the 90 days trading horizon Zinc Media Group is expected to under-perform the Liberty Media. In addition to that, Zinc Media is 1.96 times more volatile than Liberty Media Corp. It trades about -0.12 of its total potential returns per unit of risk. Liberty Media Corp is currently generating about 0.19 per unit of volatility. If you would invest  8,017  in Liberty Media Corp on September 27, 2024 and sell it today you would earn a total of  488.00  from holding Liberty Media Corp or generate 6.09% return on investment over 90 days.

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

Zinc Media Group  vs.  Liberty Media Corp

Zinc Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zinc Media Group 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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Liberty Media Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Liberty Media Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Liberty Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zinc Media and Liberty Media

The main advantage of trading using opposite Zinc Media and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media 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 Zinc Media Group and Liberty Media Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.