Correlation Between ATN International and Liberty Global

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

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

Diversification Opportunities for ATN International and Liberty Global

0.86

Correlation Coefficient

ATN International  Liberty Global

Very poor diversification

The 3 months correlation between ATN and Liberty is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ATN International 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 ATN International 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 ATN International 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 ATN International i.e., ATN International and Liberty Global go up and down completely randomly.

Pair Corralation between ATN International and Liberty Global

Given the investment horizon of 90 days ATN International is expected to under-perform the Liberty Global. But the stock apears to be less risky and, when comparing its historical volatility, ATN International is 1.42 times less risky than Liberty Global. The stock trades about -0.22 of its potential returns per unit of risk. The Liberty Global PLC is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,177  in Liberty Global PLC on September 27, 2024 and sell it today you would lose (879.00) from holding Liberty Global PLC or give up 40.38% of portfolio value over 90 days.

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

ATN International  vs.  Liberty Global PLC

ATN International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATN International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Liberty Global PLC

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ATN International and Liberty Global

The main advantage of trading using opposite ATN International and Liberty Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International 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 ATN International 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.