Correlation Between LIV Capital and Compute Health
Can any of the company-specific risk be diversified away by investing in both LIV Capital and Compute Health 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 LIV Capital and Compute Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIV Capital Acquisition and Compute Health Acquisition, you can compare the effects of market volatilities on LIV Capital and Compute Health 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 LIV Capital with a short position of Compute Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIV Capital and Compute Health.
Diversification Opportunities for LIV Capital and Compute Health
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIV and Compute is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding LIV Capital Acquisition and Compute Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compute Health Acqui and LIV Capital 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 LIV Capital Acquisition are associated (or correlated) with Compute Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compute Health Acqui has no effect on the direction of LIV Capital i.e., LIV Capital and Compute Health go up and down completely randomly.
Pair Corralation between LIV Capital and Compute Health
Given the investment horizon of 90 days LIV Capital is expected to generate 1.43 times less return on investment than Compute Health. But when comparing it to its historical volatility, LIV Capital Acquisition is 1.29 times less risky than Compute Health. It trades about 0.19 of its potential returns per unit of risk. Compute Health Acquisition is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Compute Health Acquisition on September 3, 2024 and sell it today you would earn a total of 57.00 from holding Compute Health Acquisition or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.35% |
| Values | Daily Returns |
LIV Capital Acquisition vs. Compute Health Acquisition
Performance |
| Timeline |
| LIV Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Compute Health Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LIV Capital and Compute Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIV Capital and Compute Health
The main advantage of trading using opposite LIV Capital and Compute Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIV Capital position performs unexpectedly, Compute Health 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 Compute Health will offset losses from the drop in Compute Health's long position.| LIV Capital vs. IX Acquisition Corp | LIV Capital vs. LatAmGrowth SPAC | LIV Capital vs. Portage Fintech Acquisition | LIV Capital vs. Swiftmerge Acquisition Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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