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
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coastal and LiveChain is -0.25. 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 Acq is expected to generate 5.25 times more return on investment than LiveChain. However, Coastal Capital is 5.25 times more volatile than LiveChain. It trades about 0.08 of its potential returns per unit of risk. LiveChain is currently generating about 0.22 per unit of risk. If you would invest 0.08 in Coastal Capital Acq on October 26, 2024 and sell it today you would lose (0.01) from holding Coastal Capital Acq or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| 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. American Leisure Holdings | LiveChain vs. Absolute Health and | LiveChain vs. Supurva Healthcare Group | LiveChain vs. China Health Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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