Correlation Between Liberty Broadband and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and GigaMedia 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 GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and GigaMedia, you can compare the effects of market volatilities on Liberty Broadband and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and GigaMedia.
Diversification Opportunities for Liberty Broadband and GigaMedia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and GigaMedia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and GigaMedia go up and down completely randomly.
Pair Corralation between Liberty Broadband and GigaMedia
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.22 times less return on investment than GigaMedia. In addition to that, Liberty Broadband is 2.06 times more volatile than GigaMedia. It trades about 0.12 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.29 per unit of volatility. If you would invest 117.00 in GigaMedia on August 30, 2024 and sell it today you would earn a total of 16.00 from holding GigaMedia or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. GigaMedia
Performance |
| Timeline |
| Liberty Broadband |
| GigaMedia |
Liberty Broadband and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and GigaMedia
The main advantage of trading using opposite Liberty Broadband and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| Liberty Broadband vs. Superior Plus Corp | Liberty Broadband vs. NMI Holdings | Liberty Broadband vs. SIVERS SEMICONDUCTORS AB | Liberty Broadband vs. Talanx AG |
| GigaMedia vs. Liberty Broadband | GigaMedia vs. MHP Hotel AG | GigaMedia vs. HYATT HOTELS A | GigaMedia vs. GOLD ROAD RES |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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