Correlation Between Liberty Media and Curiositystream

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

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

Diversification Opportunities for Liberty Media and Curiositystream

-0.14

Correlation Coefficient

Liberty Media  Curiositystream

Good diversification

The 3 months correlation between Liberty and Curiositystream is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Curiositystream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curiositystream 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 Curiositystream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curiositystream has no effect on the direction of Liberty Media i.e., Liberty Media and Curiositystream go up and down completely randomly.

Pair Corralation between Liberty Media and Curiositystream

Assuming the 90 days horizon Liberty Media is expected to under-perform the Curiositystream. But the stock apears to be less risky and, when comparing its historical volatility, Liberty Media is 8.79 times less risky than Curiositystream. The stock trades about -0.88 of its potential returns per unit of risk. The Curiositystream is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Curiositystream on September 3, 2024 and sell it today you would earn a total of  29.00  from holding Curiositystream or generate 18.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.94%
Values	Daily Returns

Liberty Media  vs.  Curiositystream

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 weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Curiositystream

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Curiositystream are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Curiositystream demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liberty Media and Curiositystream

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

The idea behind Liberty Media and Curiositystream 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.