Correlation Between Liberty Gold and New World
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and New World 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 New World 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 New World Gold, you can compare the effects of market volatilities on Liberty Gold and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and New World.
Diversification Opportunities for Liberty Gold and New World
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liberty and New is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and New World Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Gold has no effect on the direction of Liberty Gold i.e., Liberty Gold and New World go up and down completely randomly.
Pair Corralation between Liberty Gold and New World
Assuming the 90 days horizon Liberty Gold is expected to generate 335.21 times less return on investment than New World. But when comparing it to its historical volatility, Liberty Gold Corp is 24.25 times less risky than New World. It trades about 0.01 of its potential returns per unit of risk. New World Gold is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.01 in New World Gold on August 29, 2024 and sell it today you would earn a total of 0.00 from holding New World Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Liberty Gold Corp vs. New World Gold
Performance |
| Timeline |
| Liberty Gold Corp |
| New World Gold |
Liberty Gold and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and New World
The main advantage of trading using opposite Liberty Gold and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Liberty Gold vs. Silver Hammer Mining | Liberty Gold vs. Reyna Silver Corp | Liberty Gold vs. Guanajuato Silver | Liberty Gold vs. Silver One Resources |
| New World vs. Gncc Capital | New World vs. American International Ventures | New World vs. Rackla Metals | New World vs. Allegiant Gold |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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