Correlation Between Gold Royalty and Liberty Gold
Can any of the company-specific risk be diversified away by investing in both Gold Royalty and Liberty Gold 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 Gold Royalty and Liberty Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Royalty Corp and Liberty Gold Corp, you can compare the effects of market volatilities on Gold Royalty and Liberty Gold 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 Gold Royalty with a short position of Liberty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Royalty and Liberty Gold.
Diversification Opportunities for Gold Royalty and Liberty Gold
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gold and Liberty is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gold Royalty Corp and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Gold Corp and Gold Royalty 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 Gold Royalty Corp are associated (or correlated) with Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of Gold Royalty i.e., Gold Royalty and Liberty Gold go up and down completely randomly.
Pair Corralation between Gold Royalty and Liberty Gold
Given the investment horizon of 90 days Gold Royalty Corp is expected to generate 0.48 times more return on investment than Liberty Gold. However, Gold Royalty Corp is 2.09 times less risky than Liberty Gold. It trades about -0.24 of its potential returns per unit of risk. Liberty Gold Corp is currently generating about -0.13 per unit of risk. If you would invest 147.00 in Gold Royalty Corp on September 1, 2024 and sell it today you would lose (18.00) from holding Gold Royalty Corp or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gold Royalty Corp vs. Liberty Gold Corp
Performance |
| Timeline |
| Gold Royalty Corp |
| Liberty Gold Corp |
Gold Royalty and Liberty Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Royalty and Liberty Gold
The main advantage of trading using opposite Gold Royalty and Liberty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Royalty position performs unexpectedly, Liberty Gold 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 Gold will offset losses from the drop in Liberty Gold's long position.| Gold Royalty vs. Endeavour Silver Corp | Gold Royalty vs. SilverCrest Metals | Gold Royalty vs. Platinum Group Metals | Gold Royalty vs. New Pacific Metals |
| Liberty Gold vs. First Majestic Silver | Liberty Gold vs. Ivanhoe Energy | Liberty Gold vs. Orezone Gold Corp | Liberty Gold vs. Faraday Copper Corp |
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 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.
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