Correlation Between Liberty Resources and Kernel Group

Can any of the company-specific risk be diversified away by investing in both Liberty Resources and Kernel Group 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 Resources and Kernel Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liberty Resources Acquisition and Kernel Group Holdings, you can compare the effects of market volatilities on Liberty Resources and Kernel Group 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 Resources with a short position of Kernel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Resources and Kernel Group.

Diversification Opportunities for Liberty Resources and Kernel Group

-0.56

Correlation Coefficient

Liberty Resources  Kernel Group

Excellent diversification

The 3 months correlation between Liberty and Kernel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Resources Acquisition and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings and Liberty 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 Liberty Resources Acquisition are associated (or correlated) with Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Liberty Resources i.e., Liberty Resources and Kernel Group go up and down completely randomly.

Pair Corralation between Liberty Resources and Kernel Group

If you would invest  5.00  in Liberty Resources Acquisition on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Liberty Resources Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.35%
Values	Daily Returns

Liberty Resources Acquisition  vs.  Kernel Group Holdings

Liberty Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Resources Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Liberty Resources is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Kernel Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Liberty Resources and Kernel Group

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

The idea behind Liberty Resources Acquisition and Kernel Group Holdings 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.