Correlation Between ECD Automotive and Live Ventures
Can any of the company-specific risk be diversified away by investing in both ECD Automotive 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 ECD Automotive and Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and Live Ventures, you can compare the effects of market volatilities on ECD Automotive 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 ECD Automotive with a short position of Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and Live Ventures.
Diversification Opportunities for ECD Automotive and Live Ventures
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECD and Live is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and ECD Automotive 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 ECD Automotive Design 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 ECD Automotive i.e., ECD Automotive and Live Ventures go up and down completely randomly.
Pair Corralation between ECD Automotive and Live Ventures
Assuming the 90 days horizon ECD Automotive Design is expected to generate 5.43 times more return on investment than Live Ventures. However, ECD Automotive is 5.43 times more volatile than Live Ventures. It trades about 0.04 of its potential returns per unit of risk. Live Ventures is currently generating about -0.29 per unit of risk. If you would invest 2.48 in ECD Automotive Design on August 25, 2024 and sell it today you would lose (0.19) from holding ECD Automotive Design or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 28.89% |
| Values | Daily Returns |
ECD Automotive Design vs. Live Ventures
Performance |
| Timeline |
| ECD Automotive Design |
| Live Ventures |
ECD Automotive and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECD Automotive and Live Ventures
The main advantage of trading using opposite ECD Automotive and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive 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.| ECD Automotive vs. Live Ventures | ECD Automotive vs. LGI Homes | ECD Automotive vs. Addus HomeCare | ECD Automotive vs. Western Digital |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kingfisher plc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |