Correlation Between Liberty Financial and Maggie Beer
Can any of the company-specific risk be diversified away by investing in both Liberty Financial and Maggie Beer 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 Maggie Beer 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 Maggie Beer Holdings, you can compare the effects of market volatilities on Liberty Financial and Maggie Beer 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 Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Financial and Maggie Beer.
Diversification Opportunities for Liberty Financial and Maggie Beer
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liberty and Maggie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Financial Group and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings 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 Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of Liberty Financial i.e., Liberty Financial and Maggie Beer go up and down completely randomly.
Pair Corralation between Liberty Financial and Maggie Beer
Assuming the 90 days trading horizon Liberty Financial Group is expected to generate 0.53 times more return on investment than Maggie Beer. However, Liberty Financial Group is 1.88 times less risky than Maggie Beer. It trades about 0.3 of its potential returns per unit of risk. Maggie Beer Holdings is currently generating about 0.04 per unit of risk. If you would invest 325.00 in Liberty Financial Group on October 28, 2024 and sell it today you would earn a total of 37.00 from holding Liberty Financial Group or generate 11.38% 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. Maggie Beer Holdings
Performance |
| Timeline |
| Liberty Financial |
| Maggie Beer Holdings |
Liberty Financial and Maggie Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Financial and Maggie Beer
The main advantage of trading using opposite Liberty Financial and Maggie Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Financial position performs unexpectedly, Maggie Beer 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 Maggie Beer will offset losses from the drop in Maggie Beer's long position.| Liberty Financial vs. Kip McGrath Education | Liberty Financial vs. Step One Clothing | Liberty Financial vs. Ora Banda Mining | Liberty Financial vs. MetalsGrove Mining |
| Maggie Beer vs. Vitura Health Limited | Maggie Beer vs. Apiam Animal Health | Maggie Beer vs. Epsilon Healthcare | Maggie Beer vs. ACDC Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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