Correlation Between Liberty Resources and Fintech Ecosystem

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

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

Diversification Opportunities for Liberty Resources and Fintech Ecosystem

0.33

Correlation Coefficient

Liberty Resources  Fintech Ecosystem

Weak diversification

The 3 months correlation between Liberty and Fintech is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Resources Acquisition and Fintech Ecosystem Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fintech Ecosystem and Liberty Resources 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 Resources Acquisition are associated (or correlated) with Fintech Ecosystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fintech Ecosystem has no effect on the direction of Liberty Resources i.e., Liberty Resources and Fintech Ecosystem go up and down completely randomly.

Pair Corralation between Liberty Resources and Fintech Ecosystem

Assuming the 90 days horizon Liberty Resources is expected to generate 45.64 times less return on investment than Fintech Ecosystem. But when comparing it to its historical volatility, Liberty Resources Acquisition is 14.52 times less risky than Fintech Ecosystem. It trades about 0.05 of its potential returns per unit of risk. Fintech Ecosystem Development is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3.25  in Fintech Ecosystem Development on October 3, 2024 and sell it today you would lose (3.08) from holding Fintech Ecosystem Development or give up 94.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.77%
Values	Daily Returns

Liberty Resources Acquisition  vs.  Fintech Ecosystem Development

Liberty Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Resources Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Liberty Resources is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fintech Ecosystem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fintech Ecosystem Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Fintech Ecosystem is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Liberty Resources and Fintech Ecosystem

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

The idea behind Liberty Resources Acquisition and Fintech Ecosystem Development 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.