Correlation Between Fiera Capital and Libero Copper

Can any of the company-specific risk be diversified away by investing in both Fiera Capital and Libero Copper 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 Fiera Capital and Libero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fiera Capital and Libero Copper Corp, you can compare the effects of market volatilities on Fiera Capital and Libero Copper 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 Fiera Capital with a short position of Libero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiera Capital and Libero Copper.

Diversification Opportunities for Fiera Capital and Libero Copper

0.75

Correlation Coefficient

Fiera Capital  Libero Copper

Poor diversification

The 3 months correlation between Fiera and Libero is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fiera Capital and Libero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Corp and Fiera Capital 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 Fiera Capital are associated (or correlated) with Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Corp has no effect on the direction of Fiera Capital i.e., Fiera Capital and Libero Copper go up and down completely randomly.

Pair Corralation between Fiera Capital and Libero Copper

Assuming the 90 days trading horizon Fiera Capital is expected to generate 2.0 times less return on investment than Libero Copper. But when comparing it to its historical volatility, Fiera Capital is 2.61 times less risky than Libero Copper. It trades about 0.1 of its potential returns per unit of risk. Libero Copper Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Libero Copper Corp on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Libero Copper Corp or generate 21.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fiera Capital  vs.  Libero Copper Corp

Fiera Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fiera Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fiera Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Libero Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Libero Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Libero Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fiera Capital and Libero Copper

The main advantage of trading using opposite Fiera Capital and Libero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiera Capital position performs unexpectedly, Libero Copper 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 Libero Copper will offset losses from the drop in Libero Copper's long position.

The idea behind Fiera Capital and Libero Copper Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.