Correlation Between Liberty Financial and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Liberty Financial and K2 Asset 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 Financial and K2 Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Financial Group and K2 Asset Management, you can compare the effects of market volatilities on Liberty Financial and K2 Asset 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 Financial with a short position of K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Financial and K2 Asset.
Diversification Opportunities for Liberty Financial and K2 Asset
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and KAM is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Financial Group and K2 Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Asset Management and Liberty Financial 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 Financial Group are associated (or correlated) with K2 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Asset Management has no effect on the direction of Liberty Financial i.e., Liberty Financial and K2 Asset go up and down completely randomly.
Pair Corralation between Liberty Financial and K2 Asset
Assuming the 90 days trading horizon Liberty Financial Group is expected to generate 1.42 times more return on investment than K2 Asset. However, Liberty Financial is 1.42 times more volatile than K2 Asset Management. It trades about 0.17 of its potential returns per unit of risk. K2 Asset Management is currently generating about -0.33 per unit of risk. If you would invest 320.00 in Liberty Financial Group on October 12, 2024 and sell it today you would earn a total of 18.00 from holding Liberty Financial Group or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Financial Group vs. K2 Asset Management
Performance |
| Timeline |
| Liberty Financial |
| K2 Asset Management |
Liberty Financial and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Financial and K2 Asset
The main advantage of trading using opposite Liberty Financial and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Financial position performs unexpectedly, K2 Asset 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 K2 Asset will offset losses from the drop in K2 Asset's long position.| Liberty Financial vs. Microequities Asset Management | Liberty Financial vs. Spirit Telecom | Liberty Financial vs. FireFly Metals | Liberty Financial vs. Kip McGrath Education |
| K2 Asset vs. Liberty Financial Group | K2 Asset vs. Perpetual Credit Income | K2 Asset vs. Kkr Credit Income | K2 Asset vs. BSP Financial Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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