Correlation Between Liberty Broadband and GPT
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and GPT 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 GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and GPT Group, you can compare the effects of market volatilities on Liberty Broadband and GPT 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 GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and GPT.
Diversification Opportunities for Liberty Broadband and GPT
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and GPT is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group 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 GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and GPT go up and down completely randomly.
Pair Corralation between Liberty Broadband and GPT
Assuming the 90 days horizon Liberty Broadband is expected to under-perform the GPT. In addition to that, Liberty Broadband is 1.21 times more volatile than GPT Group. It trades about -0.08 of its total potential returns per unit of risk. GPT Group is currently generating about 0.09 per unit of volatility. If you would invest 275.00 in GPT Group on September 4, 2024 and sell it today you would earn a total of 11.00 from holding GPT Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Liberty Broadband vs. GPT Group
Performance |
| Timeline |
| Liberty Broadband |
| GPT Group |
Liberty Broadband and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and GPT
The main advantage of trading using opposite Liberty Broadband and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| Liberty Broadband vs. Nok Airlines PCL | Liberty Broadband vs. Singapore Airlines Limited | Liberty Broadband vs. Southwest Airlines Co | Liberty Broadband vs. Gol Intelligent Airlines |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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