Correlation Between Liberty Braves and Carsmartt

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

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

Diversification Opportunities for Liberty Braves and Carsmartt

0.56

Correlation Coefficient

Liberty Braves  Carsmartt

Very weak diversification

The 3 months correlation between Liberty and Carsmartt is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Liberty Braves and Carsmartt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsmartt and Liberty Braves 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 The Liberty Braves are associated (or correlated) with Carsmartt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsmartt has no effect on the direction of Liberty Braves i.e., Liberty Braves and Carsmartt go up and down completely randomly.

Pair Corralation between Liberty Braves and Carsmartt

Assuming the 90 days horizon The Liberty Braves is expected to generate 0.28 times more return on investment than Carsmartt. However, The Liberty Braves is 3.62 times less risky than Carsmartt. It trades about 0.03 of its potential returns per unit of risk. Carsmartt is currently generating about -0.01 per unit of risk. If you would invest  6,250  in The Liberty Braves on May 6, 2025 and sell it today you would earn a total of  25.00  from holding The Liberty Braves or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

The Liberty Braves  vs.  Carsmartt

Liberty Braves

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Liberty Braves are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Liberty Braves may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Carsmartt

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carsmartt has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Liberty Braves and Carsmartt

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

The idea behind The Liberty Braves and Carsmartt 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.