Correlation Between Liberty Gold and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Gold Reserve 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 Gold Reserve 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 Gold Reserve, you can compare the effects of market volatilities on Liberty Gold and Gold Reserve 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 Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Gold Reserve.
Diversification Opportunities for Liberty Gold and Gold Reserve
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and Gold is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Liberty Gold i.e., Liberty Gold and Gold Reserve go up and down completely randomly.
Pair Corralation between Liberty Gold and Gold Reserve
Assuming the 90 days horizon Liberty Gold Corp is expected to under-perform the Gold Reserve. But the otc stock apears to be less risky and, when comparing its historical volatility, Liberty Gold Corp is 1.11 times less risky than Gold Reserve. The otc stock trades about 0.0 of its potential returns per unit of risk. The Gold Reserve is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Gold Reserve on August 26, 2024 and sell it today you would earn a total of 93.00 from holding Gold Reserve or generate 80.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Gold Reserve
Performance |
| Timeline |
| Liberty Gold Corp |
| Gold Reserve |
Liberty Gold and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Gold Reserve
The main advantage of trading using opposite Liberty Gold and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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