Correlation Between IHS Holding and Liberty Global
Can any of the company-specific risk be diversified away by investing in both IHS Holding and Liberty Global 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 IHS Holding and Liberty Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHS Holding and Liberty Global PLC, you can compare the effects of market volatilities on IHS Holding and Liberty Global 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 IHS Holding with a short position of Liberty Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHS Holding and Liberty Global.
Diversification Opportunities for IHS Holding and Liberty Global
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IHS and Liberty is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding IHS Holding and Liberty Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Global PLC and IHS Holding 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 IHS Holding are associated (or correlated) with Liberty Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Global PLC has no effect on the direction of IHS Holding i.e., IHS Holding and Liberty Global go up and down completely randomly.
Pair Corralation between IHS Holding and Liberty Global
Considering the 90-day investment horizon IHS Holding is expected to generate 273.44 times less return on investment than Liberty Global. But when comparing it to its historical volatility, IHS Holding is 1.2 times less risky than Liberty Global. It trades about 0.0 of its potential returns per unit of risk. Liberty Global PLC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,077 in Liberty Global PLC on August 27, 2024 and sell it today you would earn a total of 255.00 from holding Liberty Global PLC or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHS Holding vs. Liberty Global PLC
Performance |
| Timeline |
| IHS Holding |
| Liberty Global PLC |
IHS Holding and Liberty Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHS Holding and Liberty Global
The main advantage of trading using opposite IHS Holding and Liberty Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHS Holding position performs unexpectedly, Liberty Global 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 Global will offset losses from the drop in Liberty Global's long position.| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
| Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Broadband Srs |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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