Correlation Between Liberty Broadband and ATN International
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and ATN International 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 ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband Corp and ATN International, you can compare the effects of market volatilities on Liberty Broadband and ATN International 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 ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and ATN International.
Diversification Opportunities for Liberty Broadband and ATN International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liberty and ATN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Corp and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International 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 Corp are associated (or correlated) with ATN International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATN International has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and ATN International go up and down completely randomly.
Pair Corralation between Liberty Broadband and ATN International
Assuming the 90 days horizon Liberty Broadband Corp is expected to generate 0.06 times more return on investment than ATN International. However, Liberty Broadband Corp is 16.14 times less risky than ATN International. It trades about 0.02 of its potential returns per unit of risk. ATN International is currently generating about -0.23 per unit of risk. If you would invest 2,390 in Liberty Broadband Corp on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Liberty Broadband Corp or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Broadband Corp vs. ATN International
Performance |
| Timeline |
| Liberty Broadband Corp |
| ATN International |
Liberty Broadband and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Broadband and ATN International
The main advantage of trading using opposite Liberty Broadband and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, ATN International 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 ATN International will offset losses from the drop in ATN International's long position.| Liberty Broadband vs. IHS Holding | Liberty Broadband vs. InterDigital | Liberty Broadband vs. Telephone and Data | Liberty Broadband vs. Telephone and Data |
| ATN International vs. Eshallgo Class A | ATN International vs. Amtech Systems | ATN International vs. Gold Fields Ltd | ATN International vs. Aegean Airlines SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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