Correlation Between Liberty Global and ATT

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

By analyzing existing cross correlation between Liberty Global PLC and ATT Inc, you can compare the effects of market volatilities on Liberty Global and ATT 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 Global with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Global and ATT.

Diversification Opportunities for Liberty Global and ATT

-0.77

Correlation Coefficient

Liberty Global  ATT

Pay attention - limited upside

The 3 months correlation between Liberty and ATT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Global PLC and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Liberty Global 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 Global PLC are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Liberty Global i.e., Liberty Global and ATT go up and down completely randomly.

Pair Corralation between Liberty Global and ATT

Assuming the 90 days horizon Liberty Global PLC is expected to under-perform the ATT. In addition to that, Liberty Global is 1.04 times more volatile than ATT Inc. It trades about -0.11 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.02 per unit of volatility. If you would invest  2,298  in ATT Inc on September 22, 2024 and sell it today you would lose (23.00) from holding ATT Inc or give up 1.0% of portfolio value over 90 days.

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

Liberty Global PLC  vs.  ATT Inc

Liberty Global PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Global PLC 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 basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ATT Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Liberty Global and ATT

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

The idea behind Liberty Global PLC and ATT Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.