Correlation Between Liberty Gold and Artemis Gold

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

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

Diversification Opportunities for Liberty Gold and Artemis Gold

-0.13

Correlation Coefficient

Liberty Gold  Artemis Gold

Good diversification

The 3 months correlation between Liberty and Artemis is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Artemis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemis Gold and Liberty Gold 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 Gold Corp are associated (or correlated) with Artemis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemis Gold has no effect on the direction of Liberty Gold i.e., Liberty Gold and Artemis Gold go up and down completely randomly.

Pair Corralation between Liberty Gold and Artemis Gold

Assuming the 90 days trading horizon Liberty Gold Corp is expected to under-perform the Artemis Gold. In addition to that, Liberty Gold is 1.18 times more volatile than Artemis Gold. It trades about -0.18 of its total potential returns per unit of risk. Artemis Gold is currently generating about -0.01 per unit of volatility. If you would invest  1,475  in Artemis Gold on September 22, 2024 and sell it today you would lose (64.00) from holding Artemis Gold or give up 4.34% of portfolio value over 90 days.

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

Liberty Gold Corp  vs.  Artemis Gold

Liberty Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Gold Corp 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 fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Artemis Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artemis Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Artemis Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Liberty Gold and Artemis Gold

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

The idea behind Liberty Gold Corp and Artemis Gold 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.