Correlation Between Excellon Resources and Liberty Gold
Can any of the company-specific risk be diversified away by investing in both Excellon Resources and Liberty 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 Excellon Resources and Liberty Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellon Resources and Liberty Gold Corp, you can compare the effects of market volatilities on Excellon Resources and Liberty 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 Excellon Resources with a short position of Liberty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellon Resources and Liberty Gold.
Diversification Opportunities for Excellon Resources and Liberty Gold
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Excellon and Liberty is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Gold Corp and Excellon 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 Excellon Resources are associated (or correlated) with Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of Excellon Resources i.e., Excellon Resources and Liberty Gold go up and down completely randomly.
Pair Corralation between Excellon Resources and Liberty Gold
Assuming the 90 days trading horizon Excellon Resources is expected to generate 1.72 times more return on investment than Liberty Gold. However, Excellon Resources is 1.72 times more volatile than Liberty Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Liberty Gold Corp is currently generating about -0.07 per unit of risk. If you would invest 10.00 in Excellon Resources on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Excellon Resources or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Excellon Resources vs. Liberty Gold Corp
Performance |
Timeline |
Excellon Resources |
Liberty Gold Corp |
Excellon Resources and Liberty Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Excellon Resources and Liberty Gold
The main advantage of trading using opposite Excellon Resources and Liberty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellon Resources position performs unexpectedly, Liberty 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 Liberty Gold will offset losses from the drop in Liberty Gold's long position.Excellon Resources vs. First Majestic Silver | Excellon Resources vs. Ivanhoe Energy | Excellon Resources vs. Orezone Gold Corp | Excellon Resources vs. Faraday Copper Corp |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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