Correlation Between Liberty Broadband and Performance Food
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Performance Food 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 Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and Performance Food Group, you can compare the effects of market volatilities on Liberty Broadband and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Performance Food.
Diversification Opportunities for Liberty Broadband and Performance Food
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liberty and Performance is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Performance Food go up and down completely randomly.
Pair Corralation between Liberty Broadband and Performance Food
Assuming the 90 days horizon Liberty Broadband is expected to under-perform the Performance Food. In addition to that, Liberty Broadband is 1.78 times more volatile than Performance Food Group. It trades about -0.06 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.19 per unit of volatility. If you would invest 8,150 in Performance Food Group on October 20, 2024 and sell it today you would earn a total of 250.00 from holding Performance Food Group or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. Performance Food Group
Performance |
| Timeline |
| Liberty Broadband |
| Performance Food |
Liberty Broadband and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Performance Food
The main advantage of trading using opposite Liberty Broadband and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Liberty Broadband vs. SCOTT TECHNOLOGY | Liberty Broadband vs. Perseus Mining Limited | Liberty Broadband vs. ANGLO ASIAN MINING | Liberty Broadband vs. UPDATE SOFTWARE |
| Performance Food vs. Easy Software AG | Performance Food vs. Liberty Broadband | Performance Food vs. GOLD ROAD RES | Performance Food vs. Texas Roadhouse |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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