Correlation Between Livermore Investments and Premier African
Can any of the company-specific risk be diversified away by investing in both Livermore Investments and Premier African 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 Premier African 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 Premier African Minerals, you can compare the effects of market volatilities on Livermore Investments and Premier African 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 Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Premier African.
Diversification Opportunities for Livermore Investments and Premier African
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Livermore and Premier is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group and Premier African Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier African Minerals 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 Premier African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier African Minerals has no effect on the direction of Livermore Investments i.e., Livermore Investments and Premier African go up and down completely randomly.
Pair Corralation between Livermore Investments and Premier African
Assuming the 90 days trading horizon Livermore Investments is expected to generate 13.79 times less return on investment than Premier African. But when comparing it to its historical volatility, Livermore Investments Group is 20.84 times less risky than Premier African. It trades about 0.3 of its potential returns per unit of risk. Premier African Minerals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3.10 in Premier African Minerals on September 23, 2024 and sell it today you would earn a total of 1.75 from holding Premier African Minerals or generate 56.45% 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. Premier African Minerals
Performance |
| Timeline |
| Livermore Investments |
| Premier African Minerals |
Livermore Investments and Premier African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Livermore Investments and Premier African
The main advantage of trading using opposite Livermore Investments and Premier African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore Investments position performs unexpectedly, Premier African 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 Premier African will offset losses from the drop in Premier African's long position.| Livermore Investments vs. Grieg Seafood | Livermore Investments vs. JB Hunt Transport | Livermore Investments vs. Qurate Retail Series | Livermore Investments vs. Gaztransport et Technigaz |
| Premier African vs. Raytheon Technologies Corp | Premier African vs. TechnipFMC PLC | Premier African vs. Lowland Investment Co | Premier African vs. Livermore Investments Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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