Correlation Between Libero Copper and Alaska Energy

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

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

Diversification Opportunities for Libero Copper and Alaska Energy

-0.27

Correlation Coefficient

Libero Copper  Alaska Energy

Very good diversification

The 3 months correlation between Libero and Alaska is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Libero Copper Corp and Alaska Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Energy Metals and Libero Copper 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 Libero Copper Corp are associated (or correlated) with Alaska Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Energy Metals has no effect on the direction of Libero Copper i.e., Libero Copper and Alaska Energy go up and down completely randomly.

Pair Corralation between Libero Copper and Alaska Energy

Assuming the 90 days horizon Libero Copper Corp is expected to generate 1.36 times more return on investment than Alaska Energy. However, Libero Copper is 1.36 times more volatile than Alaska Energy Metals. It trades about -0.06 of its potential returns per unit of risk. Alaska Energy Metals is currently generating about -0.13 per unit of risk. If you would invest  39.00  in Libero Copper Corp on September 23, 2024 and sell it today you would lose (5.00) from holding Libero Copper Corp or give up 12.82% of portfolio value over 90 days.

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

Libero Copper Corp  vs.  Alaska Energy Metals

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.

Alaska Energy Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alaska Energy Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Libero Copper and Alaska Energy

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

The idea behind Libero Copper Corp and Alaska Energy Metals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.