Correlation Between Liberty Gold and Integra Resources

Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Integra Resources 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 Integra Resources 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 Integra Resources Corp, you can compare the effects of market volatilities on Liberty Gold and Integra Resources 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 Integra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Integra Resources.

Diversification Opportunities for Liberty Gold and Integra Resources

0.89

Correlation Coefficient

Liberty Gold  Integra Resources

Very poor diversification

The 3 months correlation between Liberty and Integra is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp 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 Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of Liberty Gold i.e., Liberty Gold and Integra Resources go up and down completely randomly.

Pair Corralation between Liberty Gold and Integra Resources

Assuming the 90 days trading horizon Liberty Gold is expected to generate 1.22 times less return on investment than Integra Resources. In addition to that, Liberty Gold is 1.22 times more volatile than Integra Resources Corp. It trades about 0.12 of its total potential returns per unit of risk. Integra Resources Corp is currently generating about 0.18 per unit of volatility. If you would invest  124.00  in Integra Resources Corp on December 30, 2024 and sell it today you would earn a total of  53.00  from holding Integra Resources Corp or generate 42.74% return on investment over 90 days.

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

Liberty Gold Corp  vs.  Integra Resources Corp

Liberty Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Liberty Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Integra Resources Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Resources Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Integra Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liberty Gold and Integra Resources

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

The idea behind Liberty Gold Corp and Integra Resources Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.