Correlation Between Atlanta Braves and Liberty Media

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

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

Diversification Opportunities for Atlanta Braves and Liberty Media

-0.33

Correlation Coefficient

Atlanta Braves  Liberty Media

Very good diversification

The 3 months correlation between Atlanta and Liberty is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings, and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Atlanta Braves 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 Atlanta Braves Holdings, 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 Atlanta Braves i.e., Atlanta Braves and Liberty Media go up and down completely randomly.

Pair Corralation between Atlanta Braves and Liberty Media

Assuming the 90 days horizon Atlanta Braves Holdings, is expected to under-perform the Liberty Media. But the stock apears to be less risky and, when comparing its historical volatility, Atlanta Braves Holdings, is 1.46 times less risky than Liberty Media. The stock trades about -0.09 of its potential returns per unit of risk. The Liberty Media is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,702  in Liberty Media on September 2, 2024 and sell it today you would earn a total of  1,134  from holding Liberty Media or generate 14.72% return on investment over 90 days.

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

Atlanta Braves Holdings,  vs.  Liberty Media

Atlanta Braves Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Liberty Media

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Liberty Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlanta Braves and Liberty Media

The main advantage of trading using opposite Atlanta Braves and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanta Braves 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 Atlanta Braves Holdings, 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.