Correlation Between Liberty Broadband and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and CITIC Telecom 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 CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and CITIC Telecom International, you can compare the effects of market volatilities on Liberty Broadband and CITIC Telecom 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 CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and CITIC Telecom.
Diversification Opportunities for Liberty Broadband and CITIC Telecom
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and CITIC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and CITIC Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Telecom Intern 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 CITIC Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Telecom Intern has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and CITIC Telecom go up and down completely randomly.
Pair Corralation between Liberty Broadband and CITIC Telecom
Assuming the 90 days horizon Liberty Broadband is expected to generate 0.42 times more return on investment than CITIC Telecom. However, Liberty Broadband is 2.38 times less risky than CITIC Telecom. It trades about -0.2 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.19 per unit of risk. If you would invest 7,550 in Liberty Broadband on October 12, 2024 and sell it today you would lose (350.00) from holding Liberty Broadband or give up 4.64% 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. CITIC Telecom International
Performance |
| Timeline |
| Liberty Broadband |
| CITIC Telecom Intern |
Liberty Broadband and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and CITIC Telecom
The main advantage of trading using opposite Liberty Broadband and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, CITIC Telecom 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 CITIC Telecom will offset losses from the drop in CITIC Telecom's long position.| Liberty Broadband vs. TELECOM ITALRISP ADR10 | Liberty Broadband vs. Zoom Video Communications | Liberty Broadband vs. Cairo Communication SpA | Liberty Broadband vs. Computershare Limited |
| CITIC Telecom vs. Liberty Broadband | CITIC Telecom vs. Casio Computer CoLtd | CITIC Telecom vs. X FAB Silicon Foundries | CITIC Telecom vs. FANDIFI TECHNOLOGY P |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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