Correlation Between CuriosityStream and Liberty Global

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

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

Diversification Opportunities for CuriosityStream and Liberty Global

-0.46

Correlation Coefficient

CuriosityStream  Liberty Global

Very good diversification

The 3 months correlation between CuriosityStream and Liberty is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CuriosityStream 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 CuriosityStream 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 CuriosityStream 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 CuriosityStream i.e., CuriosityStream and Liberty Global go up and down completely randomly.

Pair Corralation between CuriosityStream and Liberty Global

Assuming the 90 days horizon CuriosityStream is expected to generate 13.71 times more return on investment than Liberty Global. However, CuriosityStream is 13.71 times more volatile than Liberty Global PLC. It trades about 0.18 of its potential returns per unit of risk. Liberty Global PLC is currently generating about -0.11 per unit of risk. If you would invest  1.26  in CuriosityStream on February 22, 2024 and sell it today you would earn a total of  1.56  from holding CuriosityStream or generate 123.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.56%
Values	Daily Returns

CuriosityStream  vs.  Liberty Global PLC

CuriosityStream

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CuriosityStream and Liberty Global

The main advantage of trading using opposite CuriosityStream and Liberty Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CuriosityStream 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.

The idea behind CuriosityStream and Liberty Global PLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.