Correlation Between Liberty All and Palmer Square
Can any of the company-specific risk be diversified away by investing in both Liberty All and Palmer Square 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 All and Palmer Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty All Star and Palmer Square Ssi, you can compare the effects of market volatilities on Liberty All and Palmer Square 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 All with a short position of Palmer Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty All and Palmer Square.
Diversification Opportunities for Liberty All and Palmer Square
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and Palmer is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star and Palmer Square Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palmer Square Ssi and Liberty All 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 All Star are associated (or correlated) with Palmer Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palmer Square Ssi has no effect on the direction of Liberty All i.e., Liberty All and Palmer Square go up and down completely randomly.
Pair Corralation between Liberty All and Palmer Square
Considering the 90-day investment horizon Liberty All Star is expected to generate 19.82 times more return on investment than Palmer Square. However, Liberty All is 19.82 times more volatile than Palmer Square Ssi. It trades about 0.19 of its potential returns per unit of risk. Palmer Square Ssi is currently generating about 0.68 per unit of risk. If you would invest 554.00 in Liberty All Star on August 28, 2024 and sell it today you would earn a total of 31.00 from holding Liberty All Star or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty All Star vs. Palmer Square Ssi
Performance |
| Timeline |
| Liberty All Star |
| Palmer Square Ssi |
Liberty All and Palmer Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty All and Palmer Square
The main advantage of trading using opposite Liberty All and Palmer Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty All position performs unexpectedly, Palmer Square 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 Palmer Square will offset losses from the drop in Palmer Square's long position.| Liberty All vs. Highland Floating Rate | Liberty All vs. Gabelli Equity Trust | Liberty All vs. Triplepoint Venture Growth | Liberty All vs. Cohen Steers Qualityome |
| Palmer Square vs. Pimco Short Asset | Palmer Square vs. Doubleline Low Duration | Palmer Square vs. Dfa One Year Fixed | Palmer Square vs. Short Term Income Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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