Correlation Between POSCO Holdings and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings 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 POSCO Holdings and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Liberty Broadband, you can compare the effects of market volatilities on POSCO Holdings 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 POSCO Holdings with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Liberty Broadband.
Diversification Opportunities for POSCO Holdings and Liberty Broadband
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Liberty is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Liberty Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband and POSCO Holdings 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 POSCO Holdings 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 POSCO Holdings i.e., POSCO Holdings and Liberty Broadband go up and down completely randomly.
Pair Corralation between POSCO Holdings and Liberty Broadband
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the Liberty Broadband. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.06 times less risky than Liberty Broadband. The stock trades about -0.18 of its potential returns per unit of risk. The Liberty Broadband is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,400 in Liberty Broadband on August 25, 2024 and sell it today you would earn a total of 1,900 from holding Liberty Broadband or generate 29.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Liberty Broadband
Performance |
| Timeline |
| POSCO Holdings |
| Liberty Broadband |
POSCO Holdings and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Liberty Broadband
The main advantage of trading using opposite POSCO Holdings and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings 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.| POSCO Holdings vs. AUST AGRICULTURAL | POSCO Holdings vs. COSTCO WHOLESALE CDR | POSCO Holdings vs. JIAHUA STORES | POSCO Holdings vs. MARKET VECTR RETAIL |
| Liberty Broadband vs. Comcast | Liberty Broadband vs. Liberty Broadband | Liberty Broadband vs. Roku Inc | Liberty Broadband vs. WideOpenWest |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |