Correlation Between Genesis Minerals and Liberty Financial

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

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

Diversification Opportunities for Genesis Minerals and Liberty Financial

0.75

Correlation Coefficient

Genesis Minerals  Liberty Financial

Poor diversification

The 3 months correlation between Genesis and Liberty is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Minerals and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial and Genesis Minerals 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 Genesis Minerals 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 Genesis Minerals i.e., Genesis Minerals and Liberty Financial go up and down completely randomly.

Pair Corralation between Genesis Minerals and Liberty Financial

Assuming the 90 days trading horizon Genesis Minerals is expected to generate 0.97 times more return on investment than Liberty Financial. However, Genesis Minerals is 1.03 times less risky than Liberty Financial. It trades about 0.29 of its potential returns per unit of risk. Liberty Financial Group is currently generating about 0.05 per unit of risk. If you would invest  255.00  in Genesis Minerals on December 27, 2024 and sell it today you would earn a total of  117.00  from holding Genesis Minerals or generate 45.88% return on investment over 90 days.

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

Genesis Minerals  vs.  Liberty Financial Group

Genesis Minerals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Minerals are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Genesis Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Liberty Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Liberty Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Genesis Minerals and Liberty Financial

The main advantage of trading using opposite Genesis Minerals and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Minerals 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 Genesis Minerals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.