Correlation Between Group 6 and Liberty Financial
Can any of the company-specific risk be diversified away by investing in both Group 6 and Liberty Financial 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 Group 6 and Liberty Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Liberty Financial Group, you can compare the effects of market volatilities on Group 6 and Liberty Financial 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 Group 6 with a short position of Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Liberty Financial.
Diversification Opportunities for Group 6 and Liberty Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Group and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial and Group 6 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 Group 6 Metals are associated (or correlated) with Liberty Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Financial has no effect on the direction of Group 6 i.e., Group 6 and Liberty Financial go up and down completely randomly.
Pair Corralation between Group 6 and Liberty Financial
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Liberty Financial. In addition to that, Group 6 is 3.13 times more volatile than Liberty Financial Group. It trades about -0.02 of its total potential returns per unit of risk. Liberty Financial Group is currently generating about -0.01 per unit of volatility. If you would invest 399.00 in Liberty Financial Group on November 1, 2024 and sell it today you would lose (31.00) from holding Liberty Financial Group or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Liberty Financial Group
Performance |
| Timeline |
| Group 6 Metals |
| Liberty Financial |
Group 6 and Liberty Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Liberty Financial
The main advantage of trading using opposite Group 6 and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Liberty Financial 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 Financial will offset losses from the drop in Liberty Financial's long position.| Group 6 vs. Ainsworth Game Technology | Group 6 vs. Treasury Wine Estates | Group 6 vs. Global Health | Group 6 vs. Fisher Paykel Healthcare |
| Liberty Financial vs. Group 6 Metals | Liberty Financial vs. Stelar Metals | Liberty Financial vs. Black Rock Mining | Liberty Financial vs. COAST ENTERTAINMENT HOLDINGS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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