Correlation Between Liberty Gold and Austin Gold
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Austin 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 Austin 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 Austin Gold Corp, you can compare the effects of market volatilities on Liberty Gold and Austin 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 Austin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Austin Gold.
Diversification Opportunities for Liberty Gold and Austin Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Austin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Austin Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austin Gold Corp 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 Austin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austin Gold Corp has no effect on the direction of Liberty Gold i.e., Liberty Gold and Austin Gold go up and down completely randomly.
Pair Corralation between Liberty Gold and Austin Gold
Assuming the 90 days horizon Liberty Gold Corp is expected to generate 0.45 times more return on investment than Austin Gold. However, Liberty Gold Corp is 2.24 times less risky than Austin Gold. It trades about -0.12 of its potential returns per unit of risk. Austin Gold Corp is currently generating about -0.11 per unit of risk. If you would invest 26.00 in Liberty Gold Corp on August 28, 2024 and sell it today you would lose (3.00) from holding Liberty Gold Corp or give up 11.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Austin Gold Corp
Performance |
| Timeline |
| Liberty Gold Corp |
| Austin Gold Corp |
Liberty Gold and Austin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Austin Gold
The main advantage of trading using opposite Liberty Gold and Austin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Austin 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 Austin Gold will offset losses from the drop in Austin Gold's long position.| Liberty Gold vs. Ascendant Resources | Liberty Gold vs. Cantex Mine Development | Liberty Gold vs. Amarc Resources | Liberty Gold vs. Sterling Metals Corp |
| Austin Gold vs. Labrador Gold Corp | Austin Gold vs. Aurion Resources | Austin Gold vs. Puma Exploration | Austin Gold vs. Golden Star Resource |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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