Correlation Between Scienjoy Holding and Liberty Media

Can any of the company-specific risk be diversified away by investing in both Scienjoy 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 Scienjoy 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 Scienjoy Holding Corp and Liberty Media, you can compare the effects of market volatilities on Scienjoy 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 Scienjoy Holding with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scienjoy Holding and Liberty Media.

Diversification Opportunities for Scienjoy Holding and Liberty Media

0.29

Correlation Coefficient

Scienjoy Holding  Liberty Media

Modest diversification

The 3 months correlation between Scienjoy and Liberty is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Scienjoy Holding Corp and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Scienjoy 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 Scienjoy Holding Corp 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 Scienjoy Holding i.e., Scienjoy Holding and Liberty Media go up and down completely randomly.

Pair Corralation between Scienjoy Holding and Liberty Media

Allowing for the 90-day total investment horizon Scienjoy Holding Corp is expected to generate 6.15 times more return on investment than Liberty Media. However, Scienjoy Holding is 6.15 times more volatile than Liberty Media. It trades about 0.01 of its potential returns per unit of risk. Liberty Media is currently generating about -0.83 per unit of risk. If you would invest  101.00  in Scienjoy Holding Corp on September 4, 2024 and sell it today you would lose (7.00) from holding Scienjoy Holding Corp or give up 6.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	9.38%
Values	Daily Returns

Scienjoy Holding Corp  vs.  Liberty Media

Scienjoy Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scienjoy Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking indicators, Scienjoy Holding is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

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 quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Scienjoy Holding and Liberty Media

The main advantage of trading using opposite Scienjoy Holding and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scienjoy 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 Scienjoy Holding Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.