Correlation Between Liberty Broadband and Axonics
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Axonics 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 Broadband and Axonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and Axonics, you can compare the effects of market volatilities on Liberty Broadband and Axonics 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 Broadband with a short position of Axonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Axonics.
Diversification Opportunities for Liberty Broadband and Axonics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Axonics is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and Axonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axonics and Liberty Broadband 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 Liberty Broadband are associated (or correlated) with Axonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axonics has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Axonics go up and down completely randomly.
Pair Corralation between Liberty Broadband and Axonics
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.13 times less return on investment than Axonics. In addition to that, Liberty Broadband is 1.24 times more volatile than Axonics. It trades about 0.03 of its total potential returns per unit of risk. Axonics is currently generating about 0.05 per unit of volatility. If you would invest 5,200 in Axonics on September 2, 2024 and sell it today you would earn a total of 1,150 from holding Axonics or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.03% |
| Values | Daily Returns |
Liberty Broadband vs. Axonics
Performance |
| Timeline |
| Liberty Broadband |
| Axonics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liberty Broadband and Axonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Axonics
The main advantage of trading using opposite Liberty Broadband and Axonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Axonics 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 Axonics will offset losses from the drop in Axonics' long position.| Liberty Broadband vs. China BlueChemical | Liberty Broadband vs. KINGBOARD CHEMICAL | Liberty Broadband vs. LION ONE METALS | Liberty Broadband vs. Harmony Gold Mining |
| Axonics vs. Canon Marketing Japan | Axonics vs. RYU Apparel | Axonics vs. URBAN OUTFITTERS | Axonics vs. Liberty Broadband |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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