Correlation Between Liberty Broadband and AMC Networks
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and AMC Networks 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 AMC Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband Srs and AMC Networks, you can compare the effects of market volatilities on Liberty Broadband and AMC Networks 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 AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and AMC Networks.
Diversification Opportunities for Liberty Broadband and AMC Networks
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and AMC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks 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 Srs are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and AMC Networks go up and down completely randomly.
Pair Corralation between Liberty Broadband and AMC Networks
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.03 times less return on investment than AMC Networks. But when comparing it to its historical volatility, Liberty Broadband Srs is 1.15 times less risky than AMC Networks. It trades about 0.09 of its potential returns per unit of risk. AMC Networks is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 869.00 in AMC Networks on August 31, 2024 and sell it today you would earn a total of 78.00 from holding AMC Networks or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband Srs vs. AMC Networks
Performance |
| Timeline |
| Liberty Broadband Srs |
| AMC Networks |
Liberty Broadband and AMC Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and AMC Networks
The main advantage of trading using opposite Liberty Broadband and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, AMC Networks 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 AMC Networks will offset losses from the drop in AMC Networks' long position.| Liberty Broadband vs. RLJ Lodging Trust | Liberty Broadband vs. Aquagold International | Liberty Broadband vs. Stepstone Group | Liberty Broadband vs. Morningstar Unconstrained Allocation |
| AMC Networks vs. Nexstar Broadcasting Group | AMC Networks vs. News Corp B | AMC Networks vs. Fox Corp Class | AMC Networks vs. Liberty Media |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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