Correlation Between Garda Diversified and Liberty Financial

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Can any of the company-specific risk be diversified away by investing in both Garda Diversified 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 Garda Diversified and Liberty Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and Liberty Financial Group, you can compare the effects of market volatilities on Garda Diversified 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 Garda Diversified with a short position of Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Liberty Financial.

Diversification Opportunities for Garda Diversified and Liberty Financial

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Garda and Liberty is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial and Garda Diversified 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 Garda Diversified Ppty 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 Garda Diversified i.e., Garda Diversified and Liberty Financial go up and down completely randomly.

Pair Corralation between Garda Diversified and Liberty Financial

Assuming the 90 days trading horizon Garda Diversified Ppty is expected to under-perform the Liberty Financial. But the stock apears to be less risky and, when comparing its historical volatility, Garda Diversified Ppty is 1.77 times less risky than Liberty Financial. The stock trades about -0.04 of its potential returns per unit of risk. The 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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Garda Diversified Ppty  vs.  Liberty Financial Group

 Performance 
       Timeline  
Garda Diversified Ppty 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Garda Diversified Ppty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Garda Diversified is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Liberty Financial 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Financial Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Liberty Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Garda Diversified and Liberty Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Garda Diversified and Liberty Financial

The main advantage of trading using opposite Garda Diversified and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified 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.
The idea behind Garda Diversified Ppty and Liberty Financial Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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