Correlation Between Liberty Gold and Orea Mining
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Orea Mining 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 Orea Mining 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 Orea Mining Corp, you can compare the effects of market volatilities on Liberty Gold and Orea Mining 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 Orea Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Orea Mining.
Diversification Opportunities for Liberty Gold and Orea Mining
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Orea is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Orea Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orea Mining Corp 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 Orea Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orea Mining Corp has no effect on the direction of Liberty Gold i.e., Liberty Gold and Orea Mining go up and down completely randomly.
Pair Corralation between Liberty Gold and Orea Mining
Assuming the 90 days horizon Liberty Gold Corp is expected to generate 0.43 times more return on investment than Orea Mining. However, Liberty Gold Corp is 2.35 times less risky than Orea Mining. It trades about 0.07 of its potential returns per unit of risk. Orea Mining Corp is currently generating about -0.14 per unit of risk. If you would invest 21.00 in Liberty Gold Corp on March 7, 2024 and sell it today you would earn a total of 3.80 from holding Liberty Gold Corp or generate 18.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 96.83% |
Values | Daily Returns |
Liberty Gold Corp vs. Orea Mining Corp
Performance |
Timeline |
Liberty Gold Corp |
Orea Mining Corp |
Liberty Gold and Orea Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liberty Gold and Orea Mining
The main advantage of trading using opposite Liberty Gold and Orea Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Orea Mining 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 Orea Mining will offset losses from the drop in Orea Mining's long position.Liberty Gold vs. Endurance Gold | Liberty Gold vs. Sixty North Gold | Liberty Gold vs. St James Gold | Liberty Gold vs. Grande Portage Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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