Correlation Between Zayo Group and Liberty Broadband

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

By analyzing existing cross correlation between Zayo Group Holdings and Liberty Broadband Srs, you can compare the effects of market volatilities on Zayo Group and Liberty Broadband 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 Zayo Group with a short position of Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zayo Group and Liberty Broadband.

Diversification Opportunities for Zayo Group and Liberty Broadband

0.0

Correlation Coefficient

Zayo Group  Liberty Broadband

Pay attention - limited upside

The 3 months correlation between Zayo and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zayo Group Holdings and Liberty Broadband Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband Srs and Zayo Group 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 Zayo Group Holdings are associated (or correlated) with Liberty Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Broadband Srs has no effect on the direction of Zayo Group i.e., Zayo Group and Liberty Broadband go up and down completely randomly.

Pair Corralation between Zayo Group and Liberty Broadband

If you would invest (100.00) in Zayo Group Holdings on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Zayo Group Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zayo Group Holdings  vs.  Liberty Broadband Srs

Zayo Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zayo Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zayo Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Liberty Broadband Srs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Broadband Srs 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 fundamental indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Zayo Group and Liberty Broadband

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

The idea behind Zayo Group Holdings and Liberty Broadband Srs 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.