Correlation Between Liberty Broadband and Gray Television
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Gray Television 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 Gray Television 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 Gray Television, you can compare the effects of market volatilities on Liberty Broadband and Gray Television 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 Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Gray Television.
Diversification Opportunities for Liberty Broadband and Gray Television
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Gray is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television 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 Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Gray Television go up and down completely randomly.
Pair Corralation between Liberty Broadband and Gray Television
Assuming the 90 days horizon Liberty Broadband Srs is expected to generate 0.53 times more return on investment than Gray Television. However, Liberty Broadband Srs is 1.9 times less risky than Gray Television. It trades about 0.13 of its potential returns per unit of risk. Gray Television is currently generating about 0.03 per unit of risk. If you would invest 5,174 in Liberty Broadband Srs on August 24, 2024 and sell it today you would earn a total of 3,416 from holding Liberty Broadband Srs or generate 66.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.6% |
| Values | Daily Returns |
Liberty Broadband Srs vs. Gray Television
Performance |
| Timeline |
| Liberty Broadband Srs |
| Gray Television |
Liberty Broadband and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Gray Television
The main advantage of trading using opposite Liberty Broadband and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| Liberty Broadband vs. Small Cap Core | Liberty Broadband vs. FitLife Brands, Common | Liberty Broadband vs. Mutual Of America | Liberty Broadband vs. Gfl Environmental Holdings |
| Gray Television vs. Western Asset Investment | Gray Television vs. Kinetik Holdings | Gray Television vs. Atmos Energy | Gray Television vs. Vistra Energy Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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