Correlation Between Comcast Corp and Liberty Global
Can any of the company-specific risk be diversified away by investing in both Comcast Corp 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 Comcast Corp and Liberty Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast Corp and Liberty Global PLC, you can compare the effects of market volatilities on Comcast Corp 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 Comcast Corp with a short position of Liberty Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and Liberty Global.
Diversification Opportunities for Comcast Corp and Liberty Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comcast and Liberty is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp 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 Comcast Corp 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 Comcast Corp 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 Comcast Corp i.e., Comcast Corp and Liberty Global go up and down completely randomly.
Pair Corralation between Comcast Corp and Liberty Global
Assuming the 90 days horizon Comcast Corp is expected to under-perform the Liberty Global. But the stock apears to be less risky and, when comparing its historical volatility, Comcast Corp is 1.53 times less risky than Liberty Global. The stock trades about -0.21 of its potential returns per unit of risk. The Liberty Global PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,673 in Liberty Global PLC on January 25, 2024 and sell it today you would lose (47.00) from holding Liberty Global PLC or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast Corp vs. Liberty Global PLC
Performance |
| Timeline |
| Comcast Corp |
| Liberty Global PLC |
Comcast Corp and Liberty Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast Corp and Liberty Global
The main advantage of trading using opposite Comcast Corp and Liberty Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp 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.| Comcast Corp vs. Cable One | Comcast Corp vs. T Mobile | Comcast Corp vs. Altice USA | Comcast Corp vs. Verizon Communications |
| Liberty Global vs. Liberty Global PLC | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Latin America | Liberty Global vs. Liberty Broadband Srs |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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