Correlation Between Liberty Broadband and Apple
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and Apple Inc, you can compare the effects of market volatilities on Liberty Broadband and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Apple.
Diversification Opportunities for Liberty Broadband and Apple
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Apple is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Apple go up and down completely randomly.
Pair Corralation between Liberty Broadband and Apple
Assuming the 90 days horizon Liberty Broadband is expected to generate 2.3 times less return on investment than Apple. In addition to that, Liberty Broadband is 1.76 times more volatile than Apple Inc. It trades about 0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of volatility. If you would invest 12,543 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 10,952 from holding Apple Inc or generate 87.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. Apple Inc
Performance |
| Timeline |
| Liberty Broadband |
| Apple Inc |
Liberty Broadband and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Apple
The main advantage of trading using opposite Liberty Broadband and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Liberty Broadband vs. Comcast | Liberty Broadband vs. WideOpenWest | Liberty Broadband vs. Superior Plus Corp | Liberty Broadband vs. NMI Holdings |
| Apple vs. Hyatt Hotels | Apple vs. Spirent Communications plc | Apple vs. Highlight Communications AG | Apple vs. MIRAMAR HOTEL INV |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |