Correlation Between Peel Mining and Liberty Financial
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Liberty Financial 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 Peel Mining and Liberty Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Liberty Financial Group, you can compare the effects of market volatilities on Peel Mining and Liberty Financial 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 Peel Mining with a short position of Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Liberty Financial.
Diversification Opportunities for Peel Mining and Liberty Financial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peel and Liberty is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial and Peel Mining 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 Peel Mining are associated (or correlated) with Liberty Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Financial has no effect on the direction of Peel Mining i.e., Peel Mining and Liberty Financial go up and down completely randomly.
Pair Corralation between Peel Mining and Liberty Financial
Assuming the 90 days trading horizon Peel Mining is expected to under-perform the Liberty Financial. In addition to that, Peel Mining is 1.08 times more volatile than Liberty Financial Group. It trades about -0.23 of its total potential returns per unit of risk. Liberty Financial Group is currently generating about 0.2 per unit of volatility. If you would invest 323.00 in Liberty Financial Group on October 14, 2024 and sell it today you would earn a total of 22.00 from holding Liberty Financial Group or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. Liberty Financial Group
Performance |
| Timeline |
| Peel Mining |
| Liberty Financial |
Peel Mining and Liberty Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Liberty Financial
The main advantage of trading using opposite Peel Mining and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Liberty Financial 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 Liberty Financial will offset losses from the drop in Liberty Financial's long position.| Peel Mining vs. Energy Technologies Limited | Peel Mining vs. Advanced Braking Technology | Peel Mining vs. Neurotech International | Peel Mining vs. Falcon Metals |
| Liberty Financial vs. Maggie Beer Holdings | Liberty Financial vs. AiMedia Technologies | Liberty Financial vs. Southern Cross Media | Liberty Financial vs. Land Homes Group |
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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