Correlation Between Genius Sports and Liberty Tri

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

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

Diversification Opportunities for Genius Sports and Liberty Tri

0.69

Correlation Coefficient

Genius Sports  Liberty Tri

Poor diversification

The 3 months correlation between Genius and Liberty is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Liberty Tri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Tri and Genius Sports 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 Genius Sports are associated (or correlated) with Liberty Tri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Tri has no effect on the direction of Genius Sports i.e., Genius Sports and Liberty Tri go up and down completely randomly.

Pair Corralation between Genius Sports and Liberty Tri

If you would invest  724.00  in Genius Sports on September 4, 2024 and sell it today you would earn a total of  251.00  from holding Genius Sports or generate 34.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Genius Sports  vs.  Liberty Tri

Genius Sports

Risk-Adjusted Performance

11 of 100

Good

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

Liberty Tri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Tri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Liberty Tri is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Genius Sports and Liberty Tri

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

The idea behind Genius Sports and Liberty Tri 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 Stocks Directory module to find actively traded stocks across global markets.