Correlation Between Livermore Investments and Stanley Black
Can any of the company-specific risk be diversified away by investing in both Livermore Investments and Stanley Black 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 Stanley Black 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 Stanley Black Decker, you can compare the effects of market volatilities on Livermore Investments and Stanley Black 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 Stanley Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Stanley Black.
Diversification Opportunities for Livermore Investments and Stanley Black
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Livermore and Stanley is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker 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 Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of Livermore Investments i.e., Livermore Investments and Stanley Black go up and down completely randomly.
Pair Corralation between Livermore Investments and Stanley Black
Assuming the 90 days trading horizon Livermore Investments Group is expected to generate 1.11 times more return on investment than Stanley Black. However, Livermore Investments is 1.11 times more volatile than Stanley Black Decker. It trades about 0.34 of its potential returns per unit of risk. Stanley Black Decker is currently generating about 0.34 per unit of risk. If you would invest 5,060 in Livermore Investments Group on November 4, 2024 and sell it today you would earn a total of 590.00 from holding Livermore Investments Group or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Livermore Investments Group vs. Stanley Black Decker
Performance |
| Timeline |
| Livermore Investments |
| Stanley Black Decker |
Livermore Investments and Stanley Black Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Livermore Investments and Stanley Black
The main advantage of trading using opposite Livermore Investments and Stanley Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore Investments position performs unexpectedly, Stanley Black 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 Stanley Black will offset losses from the drop in Stanley Black's long position.| Livermore Investments vs. Qurate Retail Series | Livermore Investments vs. Broadcom | Livermore Investments vs. JB Hunt Transport | Livermore Investments vs. EVS Broadcast Equipment |
| Stanley Black vs. Norwegian Air Shuttle | Stanley Black vs. Playtech Plc | Stanley Black vs. Fair Oaks Income | Stanley Black vs. Air Products Chemicals |
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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