Correlation Between Endeavor Group and Liberty Media

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

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

Diversification Opportunities for Endeavor Group and Liberty Media

-0.2

Correlation Coefficient

Endeavor Group  Liberty Media

Good diversification

The 3 months correlation between Endeavor and Liberty is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Endeavor Group Holdings and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media and Endeavor Group 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 Endeavor Group Holdings 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 Endeavor Group i.e., Endeavor Group and Liberty Media go up and down completely randomly.

Pair Corralation between Endeavor Group and Liberty Media

Considering the 90-day investment horizon Endeavor Group Holdings is expected to under-perform the Liberty Media. But the stock apears to be less risky and, when comparing its historical volatility, Endeavor Group Holdings is 5.38 times less risky than Liberty Media. The stock trades about -0.04 of its potential returns per unit of risk. The Liberty Media is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,156  in Liberty Media on February 6, 2024 and sell it today you would earn a total of  133.00  from holding Liberty Media or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Endeavor Group Holdings  vs.  Liberty Media

Endeavor Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavor Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Endeavor Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Liberty Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Liberty Media may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Endeavor Group and Liberty Media

The main advantage of trading using opposite Endeavor Group and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavor Group 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 Endeavor Group Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.