Correlation Between Liberty Broadband and Lict

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

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

Diversification Opportunities for Liberty Broadband and Lict

0.13

Correlation Coefficient

Liberty Broadband  Lict

Average diversification

The 3 months correlation between Liberty and Lict is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and Lict Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lict 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 Srs are associated (or correlated) with Lict. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lict has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Lict go up and down completely randomly.

Pair Corralation between Liberty Broadband and Lict

If you would invest  1,970,000  in Lict Corporation on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Lict Corporation or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Liberty Broadband Srs  vs.  Lict Corp.

Liberty Broadband Srs

Risk-Adjusted Performance

0 of 100

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 quite persistent fundamental indicators, Liberty Broadband is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Lict

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lict Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Lict is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Liberty Broadband and Lict

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

The idea behind Liberty Broadband Srs and Lict Corporation 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.