Correlation Between Liberty Broadband and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and BANK MANDIRI 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 BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and BANK MANDIRI, you can compare the effects of market volatilities on Liberty Broadband and BANK MANDIRI 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 BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and BANK MANDIRI.
Diversification Opportunities for Liberty Broadband and BANK MANDIRI
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liberty and BANK is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Liberty Broadband and BANK MANDIRI
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.55 times more return on investment than BANK MANDIRI. However, Liberty Broadband is 1.55 times more volatile than BANK MANDIRI. It trades about 0.12 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.04 per unit of risk. If you would invest 4,920 in Liberty Broadband on September 2, 2024 and sell it today you would earn a total of 3,030 from holding Liberty Broadband or generate 61.59% 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. BANK MANDIRI
Performance |
| Timeline |
| Liberty Broadband |
| BANK MANDIRI |
Liberty Broadband and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and BANK MANDIRI
The main advantage of trading using opposite Liberty Broadband and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| Liberty Broadband vs. China BlueChemical | Liberty Broadband vs. KINGBOARD CHEMICAL | Liberty Broadband vs. LION ONE METALS | Liberty Broadband vs. Harmony Gold Mining |
| BANK MANDIRI vs. Warner Music Group | BANK MANDIRI vs. VIVA WINE GROUP | BANK MANDIRI vs. United Natural Foods | BANK MANDIRI vs. Performance Food Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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