Correlation Between Liberty Media and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Liberty Media and Argo Gold 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 Media and Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Argo Gold, you can compare the effects of market volatilities on Liberty Media and Argo Gold 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 Media with a short position of Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Argo Gold.
Diversification Opportunities for Liberty Media and Argo Gold
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Argo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold and Liberty Media 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 Media are associated (or correlated) with Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Liberty Media i.e., Liberty Media and Argo Gold go up and down completely randomly.
Pair Corralation between Liberty Media and Argo Gold
Assuming the 90 days horizon Liberty Media is expected to generate 0.28 times more return on investment than Argo Gold. However, Liberty Media is 3.52 times less risky than Argo Gold. It trades about 0.28 of its potential returns per unit of risk. Argo Gold is currently generating about 0.05 per unit of risk. If you would invest 3,807 in Liberty Media on August 29, 2024 and sell it today you would earn a total of 3,510 from holding Liberty Media or generate 92.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Argo Gold
Performance |
| Timeline |
| Liberty Media |
| Argo Gold |
Liberty Media and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Argo Gold
The main advantage of trading using opposite Liberty Media and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media position performs unexpectedly, Argo Gold 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| Liberty Media vs. Imax Corp | Liberty Media vs. Liberty Media | Liberty Media vs. Liberty Media | Liberty Media vs. Hall of Fame |
| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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