Correlation Between Liberty Latin and Globalstar, Common

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

By analyzing existing cross correlation between Liberty Latin America and Globalstar, Common Stock, you can compare the effects of market volatilities on Liberty Latin and Globalstar, Common 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 Latin with a short position of Globalstar, Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Latin and Globalstar, Common.

Diversification Opportunities for Liberty Latin and Globalstar, Common

-0.36

Correlation Coefficient

Liberty Latin  Globalstar, Common

Very good diversification

The 3 months correlation between Liberty and Globalstar, is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Latin America and Globalstar, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalstar, Common Stock and Liberty Latin 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 Latin America are associated (or correlated) with Globalstar, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalstar, Common Stock has no effect on the direction of Liberty Latin i.e., Liberty Latin and Globalstar, Common go up and down completely randomly.

Pair Corralation between Liberty Latin and Globalstar, Common

Given the investment horizon of 90 days Liberty Latin America is expected to generate 0.52 times more return on investment than Globalstar, Common. However, Liberty Latin America is 1.92 times less risky than Globalstar, Common. It trades about 0.03 of its potential returns per unit of risk. Globalstar, Common Stock is currently generating about -0.12 per unit of risk. If you would invest  626.00  in Liberty Latin America on December 30, 2024 and sell it today you would earn a total of  16.00  from holding Liberty Latin America or generate 2.56% return on investment over 90 days.

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

Liberty Latin America  vs.  Globalstar, Common Stock

Liberty Latin America

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Latin America are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Liberty Latin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Globalstar, Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globalstar, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Liberty Latin and Globalstar, Common

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

The idea behind Liberty Latin America and Globalstar, Common Stock 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .