Correlation Between Liberty Broadband and X FAB
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and X FAB Silicon Foundries, you can compare the effects of market volatilities on Liberty Broadband and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and X FAB.
Diversification Opportunities for Liberty Broadband and X FAB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and XFB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and X FAB go up and down completely randomly.
Pair Corralation between Liberty Broadband and X FAB
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.12 times more return on investment than X FAB. However, Liberty Broadband is 1.12 times more volatile than X FAB Silicon Foundries. It trades about 0.01 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.02 per unit of risk. If you would invest 8,450 in Liberty Broadband on September 4, 2024 and sell it today you would lose (500.00) from holding Liberty Broadband or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Liberty Broadband vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Liberty Broadband |
| X FAB Silicon |
Liberty Broadband and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and X FAB
The main advantage of trading using opposite Liberty Broadband and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Liberty Broadband vs. Nok Airlines PCL | Liberty Broadband vs. Singapore Airlines Limited | Liberty Broadband vs. Southwest Airlines Co | Liberty Broadband vs. Gol Intelligent Airlines |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |