Correlation Between Mediaco Holding and Liberty Media

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

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

Diversification Opportunities for Mediaco Holding and Liberty Media

-0.61

Correlation Coefficient

Mediaco Holding  Liberty Media

Excellent diversification

The 3 months correlation between Mediaco and Liberty is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding i.e., Mediaco Holding and Liberty Media go up and down completely randomly.

Pair Corralation between Mediaco Holding and Liberty Media

Given the investment horizon of 90 days Mediaco Holding is expected to under-perform the Liberty Media. In addition to that, Mediaco Holding is 12.97 times more volatile than Liberty Media. It trades about -0.1 of its total potential returns per unit of risk. Liberty Media is currently generating about -0.88 per unit of volatility. If you would invest  2,342  in Liberty Media on September 3, 2024 and sell it today you would lose (113.00) from holding Liberty Media or give up 4.82% of portfolio value over 90 days.

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

Mediaco Holding  vs.  Liberty Media

Mediaco Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediaco Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward 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.

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.

Pair Trading with Mediaco Holding and Liberty Media

The main advantage of trading using opposite Mediaco Holding and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediaco Holding 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 Mediaco Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.