Correlation Between Telefonica Brasil and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both Telefonica Brasil 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 Telefonica Brasil and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica Brasil SA and Liberty Broadband Srs, you can compare the effects of market volatilities on Telefonica Brasil 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 Telefonica Brasil with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica Brasil and Liberty Broadband.
Diversification Opportunities for Telefonica Brasil and Liberty Broadband
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telefonica and Liberty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica Brasil SA and Liberty Broadband Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband Srs and Telefonica Brasil 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 Telefonica Brasil SA 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 Srs has no effect on the direction of Telefonica Brasil i.e., Telefonica Brasil and Liberty Broadband go up and down completely randomly.
Pair Corralation between Telefonica Brasil and Liberty Broadband
Considering the 90-day investment horizon Telefonica Brasil SA is expected to generate 0.72 times more return on investment than Liberty Broadband. However, Telefonica Brasil SA is 1.39 times less risky than Liberty Broadband. It trades about 0.5 of its potential returns per unit of risk. Liberty Broadband Srs is currently generating about 0.16 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonica Brasil SA vs. Liberty Broadband Srs
Performance |
| Timeline |
| Telefonica Brasil |
| Liberty Broadband Srs |
Telefonica Brasil and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica Brasil and Liberty Broadband
The main advantage of trading using opposite Telefonica Brasil and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica Brasil 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.| Telefonica Brasil vs. Vodafone Group PLC | Telefonica Brasil vs. Grupo Televisa SAB | Telefonica Brasil vs. America Movil SAB | Telefonica Brasil vs. Telefonica SA ADR |
| Liberty Broadband vs. KT Corporation | Liberty Broadband vs. Cable One | Liberty Broadband vs. Liberty Global PLC | Liberty Broadband vs. Liberty Latin America |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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