Correlation Between Liberty Gold and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals, you can compare the effects of market volatilities on Liberty Gold and Hudbay Minerals 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 Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Hudbay Minerals.
Diversification Opportunities for Liberty Gold and Hudbay Minerals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Hudbay is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals 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 Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Liberty Gold i.e., Liberty Gold and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Liberty Gold and Hudbay Minerals
Assuming the 90 days horizon Liberty Gold Corp is expected to under-perform the Hudbay Minerals. In addition to that, Liberty Gold is 1.35 times more volatile than Hudbay Minerals. It trades about -0.13 of its total potential returns per unit of risk. Hudbay Minerals is currently generating about -0.01 per unit of volatility. If you would invest 906.00 in Hudbay Minerals on September 2, 2024 and sell it today you would lose (12.00) from holding Hudbay Minerals or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Hudbay Minerals
Performance |
| Timeline |
| Liberty Gold Corp |
| Hudbay Minerals |
Liberty Gold and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Hudbay Minerals
The main advantage of trading using opposite Liberty Gold and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| Liberty Gold vs. South32 Limited | Liberty Gold vs. NioCorp Developments Ltd | Liberty Gold vs. HUMANA INC | Liberty Gold vs. SCOR PK |
| Hudbay Minerals vs. Paramount Gold Nevada | Hudbay Minerals vs. Liberty Gold Corp | Hudbay Minerals vs. GoldMining | Hudbay Minerals vs. International Tower Hill |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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