Correlation Between Liberty All and Clough Global

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

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

Diversification Opportunities for Liberty All and Clough Global

0.95

Correlation Coefficient

Liberty All  Clough Global

Almost no diversification

The 3 months correlation between Liberty and Clough is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star and Clough Global Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Ef and Liberty All 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 All Star are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Ef has no effect on the direction of Liberty All i.e., Liberty All and Clough Global go up and down completely randomly.

Pair Corralation between Liberty All and Clough Global

Considering the 90-day investment horizon Liberty All Star is expected to under-perform the Clough Global. But the fund apears to be less risky and, when comparing its historical volatility, Liberty All Star is 1.01 times less risky than Clough Global. The fund trades about -0.04 of its potential returns per unit of risk. The Clough Global Ef is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  645.00  in Clough Global Ef on December 28, 2024 and sell it today you would lose (6.00) from holding Clough Global Ef or give up 0.93% of portfolio value over 90 days.

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

Liberty All Star  vs.  Clough Global Ef

Liberty All Star

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty All Star has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Liberty All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clough Global Ef

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Ef has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable essential indicators, Clough Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Liberty All and Clough Global

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

The idea behind Liberty All Star and Clough Global Ef 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.