Correlation Between Liberty Broadband and INDIKA ENERGY
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and INDIKA ENERGY 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 INDIKA ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and INDIKA ENERGY, you can compare the effects of market volatilities on Liberty Broadband and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and INDIKA ENERGY.
Diversification Opportunities for Liberty Broadband and INDIKA ENERGY
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and INDIKA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and INDIKA ENERGY go up and down completely randomly.
Pair Corralation between Liberty Broadband and INDIKA ENERGY
Assuming the 90 days horizon Liberty Broadband is expected to under-perform the INDIKA ENERGY. In addition to that, Liberty Broadband is 2.75 times more volatile than INDIKA ENERGY. It trades about -0.32 of its total potential returns per unit of risk. INDIKA ENERGY is currently generating about 0.14 per unit of volatility. If you would invest 9.30 in INDIKA ENERGY on September 12, 2024 and sell it today you would earn a total of 0.25 from holding INDIKA ENERGY or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Liberty Broadband vs. INDIKA ENERGY
Performance |
| Timeline |
| Liberty Broadband |
| INDIKA ENERGY |
Liberty Broadband and INDIKA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and INDIKA ENERGY
The main advantage of trading using opposite Liberty Broadband and INDIKA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, INDIKA ENERGY 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 INDIKA ENERGY will offset losses from the drop in INDIKA ENERGY's long position.| Liberty Broadband vs. Comcast | Liberty Broadband vs. WideOpenWest | Liberty Broadband vs. Superior Plus Corp | Liberty Broadband vs. NMI Holdings |
| INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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