Correlation Between Liberty Broadband and AS Latvijas
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and AS Latvijas 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 AS Latvijas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and AS Latvijas balzams, you can compare the effects of market volatilities on Liberty Broadband and AS Latvijas 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 AS Latvijas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and AS Latvijas.
Diversification Opportunities for Liberty Broadband and AS Latvijas
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and UM9 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams 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 AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and AS Latvijas go up and down completely randomly.
Pair Corralation between Liberty Broadband and AS Latvijas
Assuming the 90 days horizon Liberty Broadband is expected to generate 7.14 times more return on investment than AS Latvijas. However, Liberty Broadband is 7.14 times more volatile than AS Latvijas balzams. It trades about 0.01 of its potential returns per unit of risk. AS Latvijas balzams is currently generating about -0.02 per unit of risk. If you would invest 8,550 in Liberty Broadband on September 3, 2024 and sell it today you would lose (600.00) from holding Liberty Broadband or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband vs. AS Latvijas balzams
Performance |
| Timeline |
| Liberty Broadband |
| AS Latvijas balzams |
Liberty Broadband and AS Latvijas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and AS Latvijas
The main advantage of trading using opposite Liberty Broadband and AS Latvijas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, AS Latvijas 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 AS Latvijas will offset losses from the drop in AS Latvijas' long position.| Liberty Broadband vs. STRAYER EDUCATION | Liberty Broadband vs. CARSALESCOM | Liberty Broadband vs. Grand Canyon Education | Liberty Broadband vs. CHINA TONTINE WINES |
| AS Latvijas vs. Tsingtao Brewery | AS Latvijas vs. TRAINLINE PLC LS | AS Latvijas vs. Fukuyama Transporting Co | AS Latvijas vs. Liberty Broadband |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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