Correlation Between Livermore Investments and Hershey
Can any of the company-specific risk be diversified away by investing in both Livermore Investments and Hershey 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 Livermore Investments and Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Livermore Investments Group and Hershey Co, you can compare the effects of market volatilities on Livermore Investments and Hershey 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 Livermore Investments with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Hershey.
Diversification Opportunities for Livermore Investments and Hershey
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Livermore and Hershey is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Livermore Investments 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 Livermore Investments Group are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Livermore Investments i.e., Livermore Investments and Hershey go up and down completely randomly.
Pair Corralation between Livermore Investments and Hershey
Assuming the 90 days trading horizon Livermore Investments Group is expected to generate 1.21 times more return on investment than Hershey. However, Livermore Investments is 1.21 times more volatile than Hershey Co. It trades about 0.11 of its potential returns per unit of risk. Hershey Co is currently generating about -0.02 per unit of risk. If you would invest 2,915 in Livermore Investments Group on September 25, 2024 and sell it today you would earn a total of 1,735 from holding Livermore Investments Group or generate 59.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Livermore Investments Group vs. Hershey Co
Performance |
| Timeline |
| Livermore Investments |
| Hershey |
Livermore Investments and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Livermore Investments and Hershey
The main advantage of trading using opposite Livermore Investments and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore Investments position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Livermore Investments vs. Samsung Electronics Co | Livermore Investments vs. Samsung Electronics Co | Livermore Investments vs. Hyundai Motor | Livermore Investments vs. Toyota Motor Corp |
| Hershey vs. XLMedia PLC | Hershey vs. MediaZest plc | Hershey vs. Zinc Media Group | Hershey vs. Nordic Semiconductor ASA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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