Correlation Between Liberty Broadband and Marcus
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Marcus 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 Marcus 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 Marcus, you can compare the effects of market volatilities on Liberty Broadband and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Marcus.
Diversification Opportunities for Liberty Broadband and Marcus
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and Marcus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Marcus go up and down completely randomly.
Pair Corralation between Liberty Broadband and Marcus
Assuming the 90 days horizon Liberty Broadband is expected to generate 2.69 times less return on investment than Marcus. In addition to that, Liberty Broadband is 1.51 times more volatile than Marcus. It trades about 0.01 of its total potential returns per unit of risk. Marcus is currently generating about 0.04 per unit of volatility. If you would invest 1,619 in Marcus on August 24, 2024 and sell it today you would earn a total of 563.00 from holding Marcus or generate 34.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband Srs vs. Marcus
Performance |
| Timeline |
| Liberty Broadband Srs |
| Marcus |
Liberty Broadband and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and Marcus
The main advantage of trading using opposite Liberty Broadband and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.| Liberty Broadband vs. Cable One | Liberty Broadband vs. Liberty Broadband Corp | Liberty Broadband vs. Telkom Indonesia Tbk | Liberty Broadband vs. Liberty Global PLC |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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