Correlation Between Liberty Broadband and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Liberty Broadband and Addus HomeCare 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 Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Broadband and Addus HomeCare, you can compare the effects of market volatilities on Liberty Broadband and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Broadband and Addus HomeCare.
Diversification Opportunities for Liberty Broadband and Addus HomeCare
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Addus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Broadband and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 are associated (or correlated) with Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Liberty Broadband i.e., Liberty Broadband and Addus HomeCare go up and down completely randomly.
Pair Corralation between Liberty Broadband and Addus HomeCare
Assuming the 90 days horizon Liberty Broadband is expected to generate 1.41 times more return on investment than Addus HomeCare. However, Liberty Broadband is 1.41 times more volatile than Addus HomeCare. It trades about 0.1 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.09 per unit of risk. If you would invest 6,450 in Liberty Broadband on April 20, 2025 and sell it today you would earn a total of 1,000.00 from holding Liberty Broadband or generate 15.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Liberty Broadband vs. Addus HomeCare
Performance |
Timeline |
Liberty Broadband |
Addus HomeCare |
Liberty Broadband and Addus HomeCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liberty Broadband and Addus HomeCare
The main advantage of trading using opposite Liberty Broadband and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Broadband position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.Liberty Broadband vs. COFCO Joycome Foods | Liberty Broadband vs. ecotel communication ag | Liberty Broadband vs. Sligro Food Group | Liberty Broadband vs. CAL MAINE FOODS |
Addus HomeCare vs. Gaztransport Technigaz SA | Addus HomeCare vs. Tianjin Capital Environmental | Addus HomeCare vs. DENTSPLY SIRONA | Addus HomeCare vs. MOUNT GIBSON IRON |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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