Correlation Between Liberty Broadband and SSC Technologies

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

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

Diversification Opportunities for Liberty Broadband and SSC Technologies

0.11

Correlation Coefficient

Liberty Broadband  SSC Technologies

Average diversification

The 3 months correlation between Liberty and SSC is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and SSC Technologies Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Hol and Liberty Broadband 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 Liberty Broadband are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Hol has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and SSC Technologies go up and down completely randomly.

Pair Corralation between Liberty Broadband and SSC Technologies

Assuming the 90 days trading horizon Liberty Broadband is expected to generate 12.39 times less return on investment than SSC Technologies. But when comparing it to its historical volatility, Liberty Broadband is 1.22 times less risky than SSC Technologies. It trades about 0.02 of its potential returns per unit of risk. SSC Technologies Holdings, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  6,678  in SSC Technologies Holdings, on December 23, 2024 and sell it today you would earn a total of  1,502  from holding SSC Technologies Holdings, or generate 22.49% return on investment over 90 days.

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

Liberty Broadband  vs.  SSC Technologies Holdings,

Liberty Broadband

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Broadband are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Liberty Broadband is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SSC Technologies Hol

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SSC Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liberty Broadband and SSC Technologies

The main advantage of trading using opposite Liberty Broadband and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, SSC Technologies 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 SSC Technologies will offset losses from the drop in SSC Technologies' long position.

The idea behind Liberty Broadband and SSC Technologies Holdings, 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.