Correlation Between Liberty Gold and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Argo 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 Liberty Gold and Argo Gold 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 Argo Gold, you can compare the effects of market volatilities on Liberty Gold and Argo 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 Liberty Gold with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Argo Gold.
Diversification Opportunities for Liberty Gold and Argo Gold
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Argo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold 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 Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Liberty Gold i.e., Liberty Gold and Argo Gold go up and down completely randomly.
Pair Corralation between Liberty Gold and Argo Gold
Assuming the 90 days horizon Liberty Gold Corp is expected to under-perform the Argo Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Liberty Gold Corp is 1.37 times less risky than Argo Gold. The otc stock trades about -0.02 of its potential returns per unit of risk. The Argo Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7.24 in Argo Gold on August 26, 2024 and sell it today you would lose (2.74) from holding Argo Gold or give up 37.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Argo Gold
Performance |
| Timeline |
| Liberty Gold Corp |
| Argo Gold |
Liberty Gold and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Argo Gold
The main advantage of trading using opposite Liberty Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Argo 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
| Argo Gold vs. Aurion Resources | Argo Gold vs. Liberty Gold Corp | Argo Gold vs. Rio2 Limited | Argo Gold vs. Orezone Gold 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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