Correlation Between Liberty Broadband and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and GAMESTOP 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 GAMESTOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and GAMESTOP, you can compare the effects of market volatilities on Liberty Broadband and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and GAMESTOP.
Diversification Opportunities for Liberty Broadband and GAMESTOP
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liberty and GAMESTOP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and GAMESTOP go up and down completely randomly.
Pair Corralation between Liberty Broadband and GAMESTOP
Assuming the 90 days horizon Liberty Broadband is expected to under-perform the GAMESTOP. But the stock apears to be less risky and, when comparing its historical volatility, Liberty Broadband is 1.79 times less risky than GAMESTOP. The stock trades about -0.27 of its potential returns per unit of risk. The GAMESTOP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,579 in GAMESTOP on October 11, 2024 and sell it today you would earn a total of 624.00 from holding GAMESTOP or generate 24.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Liberty Broadband vs. GAMESTOP
Performance |
| Timeline |
| Liberty Broadband |
| GAMESTOP |
Liberty Broadband and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and GAMESTOP
The main advantage of trading using opposite Liberty Broadband and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| Liberty Broadband vs. GREENX METALS LTD | Liberty Broadband vs. JD SPORTS FASH | Liberty Broadband vs. Charter Communications | Liberty Broadband vs. TELECOM ITALIA |
| GAMESTOP vs. EVS Broadcast Equipment | GAMESTOP vs. EIDESVIK OFFSHORE NK | GAMESTOP vs. MidCap Financial Investment | GAMESTOP vs. New Residential Investment |
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.
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