Correlation Between Coastal Capital and LiveChain
Can any of the company-specific risk be diversified away by investing in both Coastal Capital and LiveChain 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 Coastal Capital and LiveChain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Capital Acq and LiveChain, you can compare the effects of market volatilities on Coastal Capital and LiveChain 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 Coastal Capital with a short position of LiveChain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Capital and LiveChain.
Diversification Opportunities for Coastal Capital and LiveChain
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coastal and LiveChain is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Capital Acq and LiveChain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveChain and Coastal Capital 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 Coastal Capital Acq are associated (or correlated) with LiveChain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveChain has no effect on the direction of Coastal Capital i.e., Coastal Capital and LiveChain go up and down completely randomly.
Pair Corralation between Coastal Capital and LiveChain
Given the investment horizon of 90 days Coastal Capital is expected to generate 1.98 times less return on investment than LiveChain. But when comparing it to its historical volatility, Coastal Capital Acq is 1.77 times less risky than LiveChain. It trades about 0.09 of its potential returns per unit of risk. LiveChain is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.90 in LiveChain on August 29, 2024 and sell it today you would lose (0.66) from holding LiveChain or give up 73.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Capital Acq vs. LiveChain
Performance |
| Timeline |
| Coastal Capital Acq |
| LiveChain |
Coastal Capital and LiveChain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Capital and LiveChain
The main advantage of trading using opposite Coastal Capital and LiveChain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Capital position performs unexpectedly, LiveChain 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 LiveChain will offset losses from the drop in LiveChain's long position.| Coastal Capital vs. LiveChain | Coastal Capital vs. CLST Holdings | Coastal Capital vs. Premier Products Group | Coastal Capital vs. Jadeart Group |
| LiveChain vs. Green Planet Bio | LiveChain vs. Azure Holding Group | LiveChain vs. Four Leaf Acquisition | LiveChain vs. Opus Magnum Ameris |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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