Correlation Between Comfort Systems and Live Ventures
Can any of the company-specific risk be diversified away by investing in both Comfort Systems 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 Comfort Systems and Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comfort Systems USA and Live Ventures, you can compare the effects of market volatilities on Comfort Systems 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 Comfort Systems with a short position of Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comfort Systems and Live Ventures.
Diversification Opportunities for Comfort Systems and Live Ventures
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Comfort and Live is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Comfort Systems USA and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and Comfort Systems 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 Comfort Systems USA 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 Comfort Systems i.e., Comfort Systems and Live Ventures go up and down completely randomly.
Pair Corralation between Comfort Systems and Live Ventures
Considering the 90-day investment horizon Comfort Systems USA is expected to generate 0.83 times more return on investment than Live Ventures. However, Comfort Systems USA is 1.2 times less risky than Live Ventures. It trades about 0.12 of its potential returns per unit of risk. Live Ventures is currently generating about -0.09 per unit of risk. If you would invest 17,620 in Comfort Systems USA on September 12, 2024 and sell it today you would earn a total of 29,706 from holding Comfort Systems USA or generate 168.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comfort Systems USA vs. Live Ventures
Performance |
| Timeline |
| Comfort Systems USA |
| Live Ventures |
Comfort Systems and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comfort Systems and Live Ventures
The main advantage of trading using opposite Comfort Systems and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comfort Systems 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.| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kirklands |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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