Correlation Between ATN International and Liberty Broadband

Can any of the company-specific risk be diversified away by investing in both ATN International 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 ATN International and Liberty Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATN International and Liberty Broadband Srs, you can compare the effects of market volatilities on ATN International 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 ATN International with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Liberty Broadband.

Diversification Opportunities for ATN International and Liberty Broadband

0.88

Correlation Coefficient

ATN International  Liberty Broadband

Very poor diversification

The 3 months correlation between ATN and Liberty is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ATN International 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 ATN International 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 ATN International 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 ATN International i.e., ATN International and Liberty Broadband go up and down completely randomly.

Pair Corralation between ATN International and Liberty Broadband

Given the investment horizon of 90 days ATN International is expected to under-perform the Liberty Broadband. In addition to that, ATN International is 1.05 times more volatile than Liberty Broadband Srs. It trades about -0.05 of its total potential returns per unit of risk. Liberty Broadband Srs is currently generating about -0.04 per unit of volatility. If you would invest  8,467  in Liberty Broadband Srs on November 29, 2024 and sell it today you would lose (501.00) from holding Liberty Broadband Srs or give up 5.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

ATN International  vs.  Liberty Broadband Srs

ATN International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATN International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Liberty Broadband Srs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty Broadband Srs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Liberty Broadband is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATN International and Liberty Broadband

The main advantage of trading using opposite ATN International and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International 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.

The idea behind ATN International and Liberty Broadband Srs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.