Correlation Between Liberty Broadband and FingerMotion

Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and FingerMotion 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 FingerMotion 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 FingerMotion, you can compare the effects of market volatilities on Liberty Broadband and FingerMotion 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 FingerMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and FingerMotion.

Diversification Opportunities for Liberty Broadband and FingerMotion

-0.4

Correlation Coefficient

Liberty Broadband  FingerMotion

Very good diversification

The 3 months correlation between Liberty and FingerMotion is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband Srs and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion 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 FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and FingerMotion go up and down completely randomly.

Pair Corralation between Liberty Broadband and FingerMotion

Assuming the 90 days horizon Liberty Broadband Srs is expected to generate 1.11 times more return on investment than FingerMotion. However, Liberty Broadband is 1.11 times more volatile than FingerMotion. It trades about 0.15 of its potential returns per unit of risk. FingerMotion is currently generating about 0.01 per unit of risk. If you would invest  6,017  in Liberty Broadband Srs on September 5, 2024 and sell it today you would earn a total of  2,516  from holding Liberty Broadband Srs or generate 41.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Liberty Broadband Srs  vs.  FingerMotion

Liberty Broadband Srs

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Broadband Srs are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Liberty Broadband sustained solid returns over the last few months and may actually be approaching a breakup point.

FingerMotion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FingerMotion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FingerMotion is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Liberty Broadband and FingerMotion

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

The idea behind Liberty Broadband Srs and FingerMotion 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..