Correlation Between Liberty Financial and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Liberty Financial and Kip McGrath 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 Kip McGrath 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 Kip McGrath Education, you can compare the effects of market volatilities on Liberty Financial and Kip McGrath 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 Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Financial and Kip McGrath.
Diversification Opportunities for Liberty Financial and Kip McGrath
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Liberty and Kip is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Financial Group and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education 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 Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Liberty Financial i.e., Liberty Financial and Kip McGrath go up and down completely randomly.
Pair Corralation between Liberty Financial and Kip McGrath
Assuming the 90 days trading horizon Liberty Financial Group is expected to generate 1.35 times more return on investment than Kip McGrath. However, Liberty Financial is 1.35 times more volatile than Kip McGrath Education. It trades about 0.49 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.07 per unit of risk. If you would invest 328.00 in Liberty Financial Group on November 6, 2024 and sell it today you would earn a total of 70.00 from holding Liberty Financial Group or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Financial Group vs. Kip McGrath Education
Performance |
| Timeline |
| Liberty Financial |
| Kip McGrath Education |
Liberty Financial and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Financial and Kip McGrath
The main advantage of trading using opposite Liberty Financial and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Financial position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Liberty Financial vs. Chalice Mining Limited | Liberty Financial vs. Aurelia Metals | Liberty Financial vs. Autosports Group | Liberty Financial vs. MetalsGrove Mining |
| Kip McGrath vs. K2 Asset Management | Kip McGrath vs. MFF Capital Investments | Kip McGrath vs. Microequities Asset Management | Kip McGrath vs. Pinnacle Investment Management |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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