Correlation Between Livermore Investments and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Livermore Investments and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on Livermore Investments and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Flow Traders.
Diversification Opportunities for Livermore Investments and Flow Traders
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Livermore and Flow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Livermore Investments i.e., Livermore Investments and Flow Traders go up and down completely randomly.
Pair Corralation between Livermore Investments and Flow Traders
Assuming the 90 days trading horizon Livermore Investments Group is expected to generate 0.75 times more return on investment than Flow Traders. However, Livermore Investments Group is 1.34 times less risky than Flow Traders. It trades about 0.46 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.25 per unit of risk. If you would invest 5,150 in Livermore Investments Group on November 2, 2024 and sell it today you would earn a total of 700.00 from holding Livermore Investments Group or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Livermore Investments Group vs. Flow Traders NV
Performance |
| Timeline |
| Livermore Investments |
| Flow Traders NV |
Livermore Investments and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Livermore Investments and Flow Traders
The main advantage of trading using opposite Livermore Investments and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore Investments position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Livermore Investments vs. bet at home AG | Livermore Investments vs. Made Tech Group | Livermore Investments vs. Fortune Brands Home | Livermore Investments vs. Eneraqua Technologies PLC |
| Flow Traders vs. Norwegian Air Shuttle | Flow Traders vs. Polar Capital Technology | Flow Traders vs. Raytheon Technologies Corp | Flow Traders vs. Virgin Wines UK |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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