Correlation Between De Grey and Liberty Financial
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Liberty Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Liberty Financial Group, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Liberty Financial.
Diversification Opportunities for De Grey and Liberty Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DEG and Liberty is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding De Grey 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 De Grey 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 De Grey 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 De Grey i.e., De Grey and Liberty Financial go up and down completely randomly.
Pair Corralation between De Grey and Liberty Financial
Assuming the 90 days trading horizon De Grey Mining is expected to generate 2.34 times more return on investment than Liberty Financial. However, De Grey is 2.34 times more volatile than Liberty Financial Group. It trades about 0.11 of its potential returns per unit of risk. Liberty Financial Group is currently generating about -0.05 per unit of risk. If you would invest 135.00 in De Grey Mining on September 24, 2024 and sell it today you would earn a total of 39.00 from holding De Grey Mining or generate 28.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
De Grey Mining vs. Liberty Financial Group
Performance |
Timeline |
De Grey Mining |
Liberty Financial |
De Grey and Liberty Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with De Grey and Liberty Financial
The main advantage of trading using opposite De Grey and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.De Grey vs. DY6 Metals | De Grey vs. Centuria Industrial Reit | De Grey vs. oOhMedia | De Grey vs. Collins Foods |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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