Correlation Between Liberty Resources and LIV Capital
Can any of the company-specific risk be diversified away by investing in both Liberty Resources and LIV Capital 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 Resources and LIV Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Resources Acquisition and LIV Capital Acquisition, you can compare the effects of market volatilities on Liberty Resources and LIV Capital 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 Resources with a short position of LIV Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Resources and LIV Capital.
Diversification Opportunities for Liberty Resources and LIV Capital
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and LIV is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Resources Acquisition and LIV Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIV Capital Acquisition and Liberty Resources 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 Resources Acquisition are associated (or correlated) with LIV Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIV Capital Acquisition has no effect on the direction of Liberty Resources i.e., Liberty Resources and LIV Capital go up and down completely randomly.
Pair Corralation between Liberty Resources and LIV Capital
Assuming the 90 days horizon Liberty Resources Acquisition is expected to generate 0.83 times more return on investment than LIV Capital. However, Liberty Resources Acquisition is 1.21 times less risky than LIV Capital. It trades about 0.05 of its potential returns per unit of risk. LIV Capital Acquisition is currently generating about 0.01 per unit of risk. If you would invest 8.00 in Liberty Resources Acquisition on September 3, 2024 and sell it today you would lose (3.00) from holding Liberty Resources Acquisition or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 43.05% |
| Values | Daily Returns |
Liberty Resources Acquisition vs. LIV Capital Acquisition
Performance |
| Timeline |
| Liberty Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LIV Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liberty Resources and LIV Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Resources and LIV Capital
The main advantage of trading using opposite Liberty Resources and LIV Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Resources position performs unexpectedly, LIV Capital 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 LIV Capital will offset losses from the drop in LIV Capital's long position.| Liberty Resources vs. Griffon | Liberty Resources vs. Sealed Air | Liberty Resources vs. Highway Holdings Limited | Liberty Resources vs. Eldorado Gold Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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