Correlation Between Samsung Electronics and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Liberty Broadband, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Liberty Broadband.
Diversification Opportunities for Samsung Electronics and Liberty Broadband
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Liberty is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Liberty Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband and Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Liberty Broadband go up and down completely randomly.
Pair Corralation between Samsung Electronics and Liberty Broadband
Assuming the 90 days horizon Samsung Electronics is expected to generate 41.03 times less return on investment than Liberty Broadband. But when comparing it to its historical volatility, Samsung Electronics Co is 44.5 times less risky than Liberty Broadband. It trades about 0.13 of its potential returns per unit of risk. Liberty Broadband is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,125 in Liberty Broadband on September 19, 2024 and sell it today you would earn a total of 3,005 from holding Liberty Broadband or generate 58.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Liberty Broadband
Performance |
| Timeline |
| Samsung Electronics |
| Liberty Broadband |
Samsung Electronics and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Liberty Broadband
The main advantage of trading using opposite Samsung Electronics and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Copa Holdings SA | Samsung Electronics vs. United Airlines Holdings | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. SkyWest |
| Liberty Broadband vs. Boston Beer | Liberty Broadband vs. Willamette Valley Vineyards | Liberty Broadband vs. Sphere Entertainment Co | Liberty Broadband vs. Pinterest |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |