Correlation Between Partner Communications and Liberty Global

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

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

Diversification Opportunities for Partner Communications and Liberty Global

0.0

Correlation Coefficient

Partner Communications  Liberty Global

Pay attention - limited upside

The 3 months correlation between Partner and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Partner Communications and Liberty Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Global PLC and Partner Communications 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 Partner Communications are associated (or correlated) with Liberty Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Global PLC has no effect on the direction of Partner Communications i.e., Partner Communications and Liberty Global go up and down completely randomly.

Pair Corralation between Partner Communications and Liberty Global

If you would invest (100.00) in Partner Communications on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Partner Communications or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Partner Communications  vs.  Liberty Global PLC

Partner Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Partner Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Partner Communications is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Liberty Global PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Partner Communications and Liberty Global

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

The idea behind Partner Communications and Liberty Global PLC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.