Correlation Between ED Invest and Live Motion
Can any of the company-specific risk be diversified away by investing in both ED Invest and Live Motion 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 ED Invest and Live Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ED Invest SA and Live Motion Games, you can compare the effects of market volatilities on ED Invest and Live Motion 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 ED Invest with a short position of Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ED Invest and Live Motion.
Diversification Opportunities for ED Invest and Live Motion
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EDI and Live is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ED Invest SA and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games and ED Invest 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 ED Invest SA are associated (or correlated) with Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of ED Invest i.e., ED Invest and Live Motion go up and down completely randomly.
Pair Corralation between ED Invest and Live Motion
Assuming the 90 days trading horizon ED Invest is expected to generate 2.14 times less return on investment than Live Motion. But when comparing it to its historical volatility, ED Invest SA is 8.05 times less risky than Live Motion. It trades about 0.51 of its potential returns per unit of risk. Live Motion Games is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 90.00 in Live Motion Games on October 21, 2024 and sell it today you would earn a total of 13.00 from holding Live Motion Games or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
ED Invest SA vs. Live Motion Games
Performance |
| Timeline |
| ED Invest SA |
| Live Motion Games |
ED Invest and Live Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ED Invest and Live Motion
The main advantage of trading using opposite ED Invest and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ED Invest position performs unexpectedly, Live Motion 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 Motion will offset losses from the drop in Live Motion's long position.| ED Invest vs. Answear SA | ED Invest vs. Aplisens SA | ED Invest vs. Dino Polska SA | ED Invest vs. Tauron Polska Energia |
| Live Motion vs. Mlk Foods Public | Live Motion vs. Varsav Game Studios | Live Motion vs. Immobile | Live Motion vs. GreenX Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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