Correlation Between Liberty Gold and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Ascot Resources 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 Gold and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Gold Corp and Ascot Resources, you can compare the effects of market volatilities on Liberty Gold and Ascot Resources 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 Gold with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Ascot Resources.
Diversification Opportunities for Liberty Gold and Ascot Resources
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liberty and Ascot is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Liberty Gold 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 Gold Corp are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Liberty Gold i.e., Liberty Gold and Ascot Resources go up and down completely randomly.
Pair Corralation between Liberty Gold and Ascot Resources
Assuming the 90 days trading horizon Liberty Gold Corp is expected to generate 0.71 times more return on investment than Ascot Resources. However, Liberty Gold Corp is 1.41 times less risky than Ascot Resources. It trades about -0.01 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.01 per unit of risk. If you would invest 46.00 in Liberty Gold Corp on September 2, 2024 and sell it today you would lose (16.00) from holding Liberty Gold Corp or give up 34.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Ascot Resources
Performance |
| Timeline |
| Liberty Gold Corp |
| Ascot Resources |
Liberty Gold and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Ascot Resources
The main advantage of trading using opposite Liberty Gold and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Liberty Gold vs. First Majestic Silver | Liberty Gold vs. Ivanhoe Energy | Liberty Gold vs. Orezone Gold Corp | Liberty Gold vs. Faraday Copper Corp |
| Ascot Resources vs. Western Investment | Ascot Resources vs. Canlan Ice Sports | Ascot Resources vs. Atrium Mortgage Investment | Ascot Resources vs. Pembina Pipeline 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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