Correlation Between Liberty Global and ATN International
Can any of the company-specific risk be diversified away by investing in both Liberty Global and ATN International 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 Global and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Global PLC and ATN International, you can compare the effects of market volatilities on Liberty Global and ATN International 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 Global with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and ATN International.
Diversification Opportunities for Liberty Global and ATN International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and ATN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and Liberty Global 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 Global PLC are associated (or correlated) with ATN International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATN International has no effect on the direction of Liberty Global i.e., Liberty Global and ATN International go up and down completely randomly.
Pair Corralation between Liberty Global and ATN International
Assuming the 90 days horizon Liberty Global PLC is expected to generate 1.23 times more return on investment than ATN International. However, Liberty Global is 1.23 times more volatile than ATN International. It trades about -0.03 of its potential returns per unit of risk. ATN International is currently generating about -0.04 per unit of risk. If you would invest 1,720 in Liberty Global PLC on September 26, 2024 and sell it today you would lose (498.00) from holding Liberty Global PLC or give up 28.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Liberty Global PLC vs. ATN International
Performance |
Timeline |
Liberty Global PLC |
ATN International |
Liberty Global and ATN International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liberty Global and ATN International
The main advantage of trading using opposite Liberty Global and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Global position performs unexpectedly, ATN International 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 ATN International will offset losses from the drop in ATN International's long position.Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Broadband Srs |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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