Correlation Between Juventus Football and Liberty Media

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

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

Diversification Opportunities for Juventus Football and Liberty Media

0.21

Correlation Coefficient

Juventus Football  Liberty Media

Modest diversification

The 3 months correlation between Juventus and Liberty is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Juventus Football Club and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Juventus Football 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 Juventus Football Club 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 Juventus Football i.e., Juventus Football and Liberty Media go up and down completely randomly.

Pair Corralation between Juventus Football and Liberty Media

Assuming the 90 days horizon Juventus Football Club is expected to under-perform the Liberty Media. In addition to that, Juventus Football is 4.63 times more volatile than Liberty Media. It trades about -0.39 of its total potential returns per unit of risk. Liberty Media is currently generating about 0.2 per unit of volatility. If you would invest  5,860  in Liberty Media on January 30, 2024 and sell it today you would earn a total of  340.50  from holding Liberty Media or generate 5.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Juventus Football Club  vs.  Liberty Media

Juventus Football Club

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juventus Football Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Liberty Media

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Liberty Media is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Juventus Football and Liberty Media

The main advantage of trading using opposite Juventus Football and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juventus Football 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 Juventus Football Club 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.