Correlation Between FIRST SHIP and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and Liberty Broadband 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 FIRST SHIP and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and Liberty Broadband, you can compare the effects of market volatilities on FIRST SHIP and Liberty Broadband 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 FIRST SHIP with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and Liberty Broadband.
Diversification Opportunities for FIRST SHIP and Liberty Broadband
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and Liberty is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and Liberty Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband and FIRST SHIP 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 FIRST SHIP LEASE are associated (or correlated) with Liberty Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Broadband has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and Liberty Broadband go up and down completely randomly.
Pair Corralation between FIRST SHIP and Liberty Broadband
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 0.83 times more return on investment than Liberty Broadband. However, FIRST SHIP LEASE is 1.2 times less risky than Liberty Broadband. It trades about -0.06 of its potential returns per unit of risk. Liberty Broadband is currently generating about -0.09 per unit of risk. If you would invest 2.40 in FIRST SHIP LEASE on November 7, 2024 and sell it today you would lose (0.06) from holding FIRST SHIP LEASE or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. Liberty Broadband
Performance |
| Timeline |
| FIRST SHIP LEASE |
| Liberty Broadband |
FIRST SHIP and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and Liberty Broadband
The main advantage of trading using opposite FIRST SHIP and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, Liberty Broadband 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 Liberty Broadband will offset losses from the drop in Liberty Broadband's long position.| FIRST SHIP vs. COSCO SHIPPING Holdings | FIRST SHIP vs. Hapag Lloyd AG | FIRST SHIP vs. Orient Overseas Limited | FIRST SHIP vs. Mitsui OSK Lines |
| Liberty Broadband vs. GOME Retail Holdings | Liberty Broadband vs. Fast Retailing Co | Liberty Broadband vs. Mobilezone Holding AG | Liberty Broadband vs. Geely Automobile Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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