Correlation Between Liberty Broadband and Option Care
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Option Care 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 Option Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and Option Care Health, you can compare the effects of market volatilities on Liberty Broadband and Option Care 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 Option Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Option Care.
Diversification Opportunities for Liberty Broadband and Option Care
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Option is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health 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 Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Option Care go up and down completely randomly.
Pair Corralation between Liberty Broadband and Option Care
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.27 times more return on investment than Option Care. However, Liberty Broadband is 1.27 times more volatile than Option Care Health. It trades about 0.15 of its potential returns per unit of risk. Option Care Health is currently generating about -0.12 per unit of risk. If you would invest 5,300 in Liberty Broadband on September 12, 2024 and sell it today you would earn a total of 2,350 from holding Liberty Broadband or generate 44.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. Option Care Health
Performance |
| Timeline |
| Liberty Broadband |
| Option Care Health |
Liberty Broadband and Option Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Option Care
The main advantage of trading using opposite Liberty Broadband and Option Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Option Care 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 Option Care will offset losses from the drop in Option Care's long position.| Liberty Broadband vs. Magic Software Enterprises | Liberty Broadband vs. CPU SOFTWAREHOUSE | Liberty Broadband vs. Guidewire Software | Liberty Broadband vs. YATRA ONLINE DL 0001 |
| Option Care vs. Diamyd Medical AB | Option Care vs. ETFS Coffee ETC | Option Care vs. SAFETY MEDICAL PROD | Option Care vs. Japan Medical Dynamic |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| CEOs Directory Screen CEOs from public companies around the world |