Correlation Between Liberty Gold and Monarch Mining
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Monarch Mining 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 Monarch Mining 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 Monarch Mining, you can compare the effects of market volatilities on Liberty Gold and Monarch Mining 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 Monarch Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Monarch Mining.
Diversification Opportunities for Liberty Gold and Monarch Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liberty and Monarch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Monarch Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Mining 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 Monarch Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Mining has no effect on the direction of Liberty Gold i.e., Liberty Gold and Monarch Mining go up and down completely randomly.
Pair Corralation between Liberty Gold and Monarch Mining
Assuming the 90 days horizon Liberty Gold Corp is expected to generate 0.45 times more return on investment than Monarch Mining. However, Liberty Gold Corp is 2.21 times less risky than Monarch Mining. It trades about 0.0 of its potential returns per unit of risk. Monarch Mining is currently generating about -0.01 per unit of risk. If you would invest 34.00 in Liberty Gold Corp on August 26, 2024 and sell it today you would lose (13.00) from holding Liberty Gold Corp or give up 38.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Liberty Gold Corp vs. Monarch Mining
Performance |
| Timeline |
| Liberty Gold Corp |
| Monarch Mining |
Liberty Gold and Monarch Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Monarch Mining
The main advantage of trading using opposite Liberty Gold and Monarch Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Monarch Mining 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 Monarch Mining will offset losses from the drop in Monarch Mining's long position.| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
| Monarch Mining vs. Lundin Gold | Monarch Mining vs. Gold Reserve | Monarch Mining vs. Liberty Gold Corp | Monarch Mining vs. Dynacor Gold Mines |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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