Correlation Between Liberty Broadband and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and PPG Industries 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 PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and PPG Industries, you can compare the effects of market volatilities on Liberty Broadband and PPG Industries 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 PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and PPG Industries.
Diversification Opportunities for Liberty Broadband and PPG Industries
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and PPG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and PPG Industries go up and down completely randomly.
Pair Corralation between Liberty Broadband and PPG Industries
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.87 times more return on investment than PPG Industries. However, Liberty Broadband is 1.87 times more volatile than PPG Industries. It trades about 0.0 of its potential returns per unit of risk. PPG Industries is currently generating about 0.0 per unit of risk. If you would invest 8,050 in Liberty Broadband on October 7, 2024 and sell it today you would lose (750.00) from holding Liberty Broadband or give up 9.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. PPG Industries
Performance |
| Timeline |
| Liberty Broadband |
| PPG Industries |
Liberty Broadband and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and PPG Industries
The main advantage of trading using opposite Liberty Broadband and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| Liberty Broadband vs. Superior Plus Corp | Liberty Broadband vs. NMI Holdings | Liberty Broadband vs. SIVERS SEMICONDUCTORS AB | Liberty Broadband vs. Talanx AG |
| PPG Industries vs. CarsalesCom | PPG Industries vs. Inspire Medical Systems | PPG Industries vs. MeVis Medical Solutions | PPG Industries vs. INTER CARS SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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