Correlation Between Liberty Global and KT
Can any of the company-specific risk be diversified away by investing in both Liberty Global and KT 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 Global and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Global PLC and KT Corporation, you can compare the effects of market volatilities on Liberty Global and KT 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 Global with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and KT.
Diversification Opportunities for Liberty Global and KT
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and KT is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Liberty Global 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 Global PLC are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Liberty Global i.e., Liberty Global and KT go up and down completely randomly.
Pair Corralation between Liberty Global and KT
Assuming the 90 days horizon Liberty Global PLC is expected to under-perform the KT. In addition to that, Liberty Global is 1.94 times more volatile than KT Corporation. It trades about -0.01 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.05 per unit of volatility. If you would invest 1,225 in KT Corporation on August 27, 2024 and sell it today you would earn a total of 435.00 from holding KT Corporation or generate 35.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Global PLC vs. KT Corp.
Performance |
| Timeline |
| Liberty Global PLC |
| KT Corporation |
Liberty Global and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Global and KT
The main advantage of trading using opposite Liberty Global and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Global position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Broadband Srs |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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