Correlation Between Arhaus and Live Ventures
Can any of the company-specific risk be diversified away by investing in both Arhaus and Live Ventures 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 Arhaus and Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arhaus Inc and Live Ventures, you can compare the effects of market volatilities on Arhaus and Live Ventures 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 Arhaus with a short position of Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arhaus and Live Ventures.
Diversification Opportunities for Arhaus and Live Ventures
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arhaus and Live is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and Arhaus 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 Arhaus Inc are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of Arhaus i.e., Arhaus and Live Ventures go up and down completely randomly.
Pair Corralation between Arhaus and Live Ventures
Given the investment horizon of 90 days Arhaus Inc is expected to generate 1.67 times more return on investment than Live Ventures. However, Arhaus is 1.67 times more volatile than Live Ventures. It trades about 0.37 of its potential returns per unit of risk. Live Ventures is currently generating about 0.12 per unit of risk. If you would invest 940.00 in Arhaus Inc on November 1, 2024 and sell it today you would earn a total of 286.00 from holding Arhaus Inc or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arhaus Inc vs. Live Ventures
Performance |
| Timeline |
| Arhaus Inc |
| Live Ventures |
Arhaus and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arhaus and Live Ventures
The main advantage of trading using opposite Arhaus and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arhaus position performs unexpectedly, Live Ventures 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 Live Ventures will offset losses from the drop in Live Ventures' long position.| Arhaus vs. Floor Decor Holdings | Arhaus vs. Live Ventures | Arhaus vs. Haverty Furniture Companies | Arhaus vs. Home Depot |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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