Correlation Between Liberty Global and Telefonica Brasil
Can any of the company-specific risk be diversified away by investing in both Liberty Global and Telefonica Brasil 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 Telefonica Brasil 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 Telefonica Brasil SA, you can compare the effects of market volatilities on Liberty Global and Telefonica Brasil 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 Telefonica Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and Telefonica Brasil.
Diversification Opportunities for Liberty Global and Telefonica Brasil
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Telefonica is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and Telefonica Brasil SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonica Brasil 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 Telefonica Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonica Brasil has no effect on the direction of Liberty Global i.e., Liberty Global and Telefonica Brasil go up and down completely randomly.
Pair Corralation between Liberty Global and Telefonica Brasil
Assuming the 90 days horizon Liberty Global PLC is expected to under-perform the Telefonica Brasil. But the stock apears to be less risky and, when comparing its historical volatility, Liberty Global PLC is 1.65 times less risky than Telefonica Brasil. The stock trades about -0.31 of its potential returns per unit of risk. The Telefonica Brasil SA is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 806.00 in Telefonica Brasil SA on November 18, 2024 and sell it today you would earn a total of 134.00 from holding Telefonica Brasil SA or generate 16.63% 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. Telefonica Brasil SA
Performance |
| Timeline |
| Liberty Global PLC |
| Telefonica Brasil |
Liberty Global and Telefonica Brasil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Global and Telefonica Brasil
The main advantage of trading using opposite Liberty Global and Telefonica Brasil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Global position performs unexpectedly, Telefonica Brasil 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 Telefonica Brasil will offset losses from the drop in Telefonica Brasil'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 |
| Telefonica Brasil vs. Vodafone Group PLC | Telefonica Brasil vs. Grupo Televisa SAB | Telefonica Brasil vs. America Movil SAB | Telefonica Brasil vs. Telefonica SA ADR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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