Correlation Between Applied Digital and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both Applied Digital and Liberty Broadband 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 Applied Digital and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Digital and Liberty Broadband Corp, you can compare the effects of market volatilities on Applied Digital and Liberty Broadband 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 Applied Digital with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and Liberty Broadband.
Diversification Opportunities for Applied Digital and Liberty Broadband
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Liberty is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and Liberty Broadband Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband Corp and Applied Digital 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 Applied Digital are associated (or correlated) with Liberty Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Broadband Corp has no effect on the direction of Applied Digital i.e., Applied Digital and Liberty Broadband go up and down completely randomly.
Pair Corralation between Applied Digital and Liberty Broadband
Given the investment horizon of 90 days Applied Digital is expected to generate 8.36 times more return on investment than Liberty Broadband. However, Applied Digital is 8.36 times more volatile than Liberty Broadband Corp. It trades about 0.17 of its potential returns per unit of risk. Liberty Broadband Corp is currently generating about -0.14 per unit of risk. If you would invest 648.00 in Applied Digital on November 28, 2024 and sell it today you would earn a total of 142.00 from holding Applied Digital or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Digital vs. Liberty Broadband Corp
Performance |
| Timeline |
| Applied Digital |
| Liberty Broadband Corp |
Applied Digital and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Digital and Liberty Broadband
The main advantage of trading using opposite Applied Digital and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Digital position performs unexpectedly, Liberty Broadband 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 Liberty Broadband will offset losses from the drop in Liberty Broadband's long position.| Applied Digital vs. Magic Empire Global | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Netcapital | Applied Digital vs. Lazard |
| Liberty Broadband vs. Hudson Pacific Properties | Liberty Broadband vs. Orion Office Reit | Liberty Broadband vs. Radcom | Liberty Broadband vs. Molecular Partners AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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