Correlation Between Liberty Latin and Anterix

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

Diversification Opportunities for Liberty Latin and Anterix

0.35

Correlation Coefficient

Liberty Latin  Anterix

Weak diversification

The 3 months correlation between Liberty and Anterix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Latin America and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix 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 Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Liberty Latin i.e., Liberty Latin and Anterix go up and down completely randomly.

Pair Corralation between Liberty Latin and Anterix

Given the investment horizon of 90 days Liberty Latin America is expected to under-perform the Anterix. But the stock apears to be less risky and, when comparing its historical volatility, Liberty Latin America is 1.44 times less risky than Anterix. The stock trades about -0.25 of its potential returns per unit of risk. The Anterix is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  3,296  in Anterix on September 27, 2024 and sell it today you would lose (168.00) from holding Anterix or give up 5.1% of portfolio value over 90 days.

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

Liberty Latin America  vs.  Anterix

Liberty Latin America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Latin America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Liberty Latin and Anterix

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

The idea behind Liberty Latin America and Anterix 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.