Correlation Between Liberty Media and E W

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

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

Diversification Opportunities for Liberty Media and E W

0.57

Correlation Coefficient

Liberty Media  E W

Very weak diversification

The 3 months correlation between Liberty and SSP is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps and Liberty 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 Liberty Media are associated (or correlated) with E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Liberty Media i.e., Liberty Media and E W go up and down completely randomly.

Pair Corralation between Liberty Media and E W

Assuming the 90 days horizon Liberty Media is expected to generate 0.34 times more return on investment than E W. However, Liberty Media is 2.92 times less risky than E W. It trades about -0.32 of its potential returns per unit of risk. E W Scripps is currently generating about -0.16 per unit of risk. If you would invest  2,971  in Liberty Media on February 27, 2024 and sell it today you would lose (725.00) from holding Liberty Media or give up 24.4% of portfolio value over 90 days.

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

Liberty Media  vs.  E W Scripps

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 abnormal performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

E W Scripps

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E W Scripps has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Liberty Media and E W

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

The idea behind Liberty Media and E W Scripps 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.