Correlation Between Beach Energy and Liberty Financial
Can any of the company-specific risk be diversified away by investing in both Beach Energy 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 Beach Energy and Liberty Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beach Energy and Liberty Financial Group, you can compare the effects of market volatilities on Beach Energy 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 Beach Energy with a short position of Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beach Energy and Liberty Financial.
Diversification Opportunities for Beach Energy and Liberty Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beach and Liberty is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Beach Energy and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial and Beach Energy 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 Beach Energy 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 Beach Energy i.e., Beach Energy and Liberty Financial go up and down completely randomly.
Pair Corralation between Beach Energy and Liberty Financial
Assuming the 90 days trading horizon Beach Energy is expected to generate 1.38 times less return on investment than Liberty Financial. But when comparing it to its historical volatility, Beach Energy is 1.21 times less risky than Liberty Financial. It trades about 0.09 of its potential returns per unit of risk. Liberty Financial Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Liberty Financial Group on December 27, 2024 and sell it today you would earn a total of 43.00 from holding Liberty Financial Group or generate 13.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Beach Energy vs. Liberty Financial Group
Performance |
Timeline |
Beach Energy |
Liberty Financial |
Beach Energy and Liberty Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beach Energy and Liberty Financial
The main advantage of trading using opposite Beach Energy and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beach Energy 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.Beach Energy vs. Beston Global Food | Beach Energy vs. Hudson Investment Group | Beach Energy vs. oOhMedia | Beach Energy vs. Arc Funds |
Liberty Financial vs. Air New Zealand | Liberty Financial vs. Kingsrose Mining | Liberty Financial vs. MetalsGrove Mining | Liberty Financial vs. Centuria Industrial Reit |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |