Correlation Between Liberty Broadband and ATT
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Liberty Broadband and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and ATT.
Diversification Opportunities for Liberty Broadband and ATT
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and ATT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and ATT go up and down completely randomly.
Pair Corralation between Liberty Broadband and ATT
Assuming the 90 days horizon Liberty Broadband Srs is expected to generate 3.4 times more return on investment than ATT. However, Liberty Broadband is 3.4 times more volatile than ATT Inc. It trades about 0.08 of its potential returns per unit of risk. ATT Inc is currently generating about 0.19 per unit of risk. If you would invest 8,092 in Liberty Broadband Srs on August 29, 2024 and sell it today you would earn a total of 389.00 from holding Liberty Broadband Srs or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband Srs vs. ATT Inc
Performance |
| Timeline |
| Liberty Broadband Srs |
| ATT Inc |
Liberty Broadband and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and ATT
The main advantage of trading using opposite Liberty Broadband and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Liberty Broadband vs. KT Corporation | Liberty Broadband vs. Cable One | Liberty Broadband vs. Liberty Global PLC | Liberty Broadband vs. Liberty Latin America |
| ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications | ATT vs. Liberty Broadband Srs | ATT vs. Shenandoah Telecommunications Co |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |