Correlation Between Liberty Broadband and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and JD SPORTS 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 JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and JD SPORTS FASH, you can compare the effects of market volatilities on Liberty Broadband and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and JD SPORTS.
Diversification Opportunities for Liberty Broadband and JD SPORTS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and 9JD is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and JD SPORTS go up and down completely randomly.
Pair Corralation between Liberty Broadband and JD SPORTS
Assuming the 90 days horizon Liberty Broadband is expected to generate 0.85 times more return on investment than JD SPORTS. However, Liberty Broadband is 1.17 times less risky than JD SPORTS. It trades about 0.0 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.02 per unit of risk. If you would invest 8,350 in Liberty Broadband on October 16, 2024 and sell it today you would lose (1,250) from holding Liberty Broadband or give up 14.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. JD SPORTS FASH
Performance |
| Timeline |
| Liberty Broadband |
| JD SPORTS FASH |
Liberty Broadband and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and JD SPORTS
The main advantage of trading using opposite Liberty Broadband and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| Liberty Broadband vs. ALBIS LEASING AG | Liberty Broadband vs. Pure Storage | Liberty Broadband vs. Tower Semiconductor | Liberty Broadband vs. DATAGROUP SE |
| JD SPORTS vs. Liberty Broadband | JD SPORTS vs. CanSino Biologics | JD SPORTS vs. ScanSource | JD SPORTS vs. NAGOYA RAILROAD |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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