Correlation Between Black Oak and Live Oak
Can any of the company-specific risk be diversified away by investing in both Black Oak and Live Oak 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 Black Oak and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Live Oak Health, you can compare the effects of market volatilities on Black Oak and Live Oak 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 Black Oak with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Live Oak.
Diversification Opportunities for Black Oak and Live Oak
Very good diversification
The 3 months correlation between Black and LIVE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Black Oak 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 Black Oak Emerging are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Black Oak i.e., Black Oak and Live Oak go up and down completely randomly.
Pair Corralation between Black Oak and Live Oak
Assuming the 90 days horizon Black Oak Emerging is expected to generate 1.39 times more return on investment than Live Oak. However, Black Oak is 1.39 times more volatile than Live Oak Health. It trades about 0.06 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.08 per unit of risk. If you would invest 810.00 in Black Oak Emerging on August 27, 2024 and sell it today you would earn a total of 12.00 from holding Black Oak Emerging or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Live Oak Health
Performance |
| Timeline |
| Black Oak Emerging |
| Live Oak Health |
Black Oak and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Live Oak
The main advantage of trading using opposite Black Oak and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, Live Oak 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 Oak will offset losses from the drop in Live Oak's long position.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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