Correlation Between Galexxy Holdings and Livewire Ergogenics
Can any of the company-specific risk be diversified away by investing in both Galexxy Holdings and Livewire Ergogenics 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 Galexxy Holdings and Livewire Ergogenics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galexxy Holdings and Livewire Ergogenics, you can compare the effects of market volatilities on Galexxy Holdings and Livewire Ergogenics 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 Galexxy Holdings with a short position of Livewire Ergogenics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and Livewire Ergogenics.
Diversification Opportunities for Galexxy Holdings and Livewire Ergogenics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Galexxy and Livewire is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and Livewire Ergogenics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livewire Ergogenics and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with Livewire Ergogenics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livewire Ergogenics has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and Livewire Ergogenics go up and down completely randomly.
Pair Corralation between Galexxy Holdings and Livewire Ergogenics
Given the investment horizon of 90 days Galexxy Holdings is expected to under-perform the Livewire Ergogenics. In addition to that, Galexxy Holdings is 1.15 times more volatile than Livewire Ergogenics. It trades about -0.01 of its total potential returns per unit of risk. Livewire Ergogenics is currently generating about -0.01 per unit of volatility. If you would invest 0.45 in Livewire Ergogenics on August 31, 2024 and sell it today you would lose (0.39) from holding Livewire Ergogenics or give up 86.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Galexxy Holdings vs. Livewire Ergogenics
Performance |
| Timeline |
| Galexxy Holdings |
| Livewire Ergogenics |
Galexxy Holdings and Livewire Ergogenics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galexxy Holdings and Livewire Ergogenics
The main advantage of trading using opposite Galexxy Holdings and Livewire Ergogenics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings position performs unexpectedly, Livewire Ergogenics 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 Livewire Ergogenics will offset losses from the drop in Livewire Ergogenics' long position.| Galexxy Holdings vs. Genesis Electronics Group | Galexxy Holdings vs. Nextmart | Galexxy Holdings vs. Emergent Health Corp | Galexxy Holdings vs. Goff Corp |
| Livewire Ergogenics vs. Signet International Holdings | Livewire Ergogenics vs. National Beverage Corp | Livewire Ergogenics vs. PT Astra International | Livewire Ergogenics vs. Vita Coco |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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