Correlation Between AGRICUL BK and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK 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 AGRICUL BK and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and Liberty Broadband, you can compare the effects of market volatilities on AGRICUL BK 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 AGRICUL BK with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Liberty Broadband.
Diversification Opportunities for AGRICUL BK and Liberty Broadband
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGRICUL and Liberty is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Liberty Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband and AGRICUL BK 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 AGRICUL BK CHINA H 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 has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Liberty Broadband go up and down completely randomly.
Pair Corralation between AGRICUL BK and Liberty Broadband
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 25.94 times less return on investment than Liberty Broadband. But when comparing it to its historical volatility, AGRICUL BK CHINA H is 1.57 times less risky than Liberty Broadband. It trades about 0.01 of its potential returns per unit of risk. Liberty Broadband is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,500 in Liberty Broadband on August 25, 2024 and sell it today you would earn a total of 800.00 from holding Liberty Broadband or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Liberty Broadband
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Liberty Broadband |
AGRICUL BK and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Liberty Broadband
The main advantage of trading using opposite AGRICUL BK and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK 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.| AGRICUL BK vs. Strategic Investments AS | AGRICUL BK vs. Apollo Investment Corp | AGRICUL BK vs. REGAL ASIAN INVESTMENTS | AGRICUL BK vs. HK Electric Investments |
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 CEOs Directory module to screen CEOs from public companies around the world.
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