Correlation Between Livermore Investments and Anglesey Mining

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

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

Diversification Opportunities for Livermore Investments and Anglesey Mining

0.54

Correlation Coefficient

Livermore Investments  Anglesey Mining

Very weak diversification

The 3 months correlation between Livermore and Anglesey is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining and Livermore Investments 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 Livermore Investments Group are associated (or correlated) with Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Livermore Investments i.e., Livermore Investments and Anglesey Mining go up and down completely randomly.

Pair Corralation between Livermore Investments and Anglesey Mining

Assuming the 90 days trading horizon Livermore Investments Group is expected to generate 0.44 times more return on investment than Anglesey Mining. However, Livermore Investments Group is 2.27 times less risky than Anglesey Mining. It trades about 0.22 of its potential returns per unit of risk. Anglesey Mining is currently generating about 0.07 per unit of risk. If you would invest  5,000  in Livermore Investments Group on December 25, 2024 and sell it today you would earn a total of  1,875  from holding Livermore Investments Group or generate 37.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Livermore Investments Group  vs.  Anglesey Mining

Livermore Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Livermore Investments Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Livermore Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Anglesey Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anglesey Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglesey Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Livermore Investments and Anglesey Mining

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

The idea behind Livermore Investments Group and Anglesey Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.