Correlation Between LIV Capital and Newbury Street
Can any of the company-specific risk be diversified away by investing in both LIV Capital and Newbury Street 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 Newbury Street 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 Newbury Street Acquisition, you can compare the effects of market volatilities on LIV Capital and Newbury Street 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 Newbury Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIV Capital and Newbury Street.
Diversification Opportunities for LIV Capital and Newbury Street
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between LIV and Newbury is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding LIV Capital Acquisition and Newbury Street Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newbury Street 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 Newbury Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newbury Street Acqui has no effect on the direction of LIV Capital i.e., LIV Capital and Newbury Street go up and down completely randomly.
Pair Corralation between LIV Capital and Newbury Street
If you would invest 19.00 in Newbury Street Acquisition on August 29, 2024 and sell it today you would lose (10.00) from holding Newbury Street Acquisition or give up 52.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.57% |
| Values | Daily Returns |
LIV Capital Acquisition vs. Newbury Street Acquisition
Performance |
| Timeline |
| LIV Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Newbury Street Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
LIV Capital and Newbury Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIV Capital and Newbury Street
The main advantage of trading using opposite LIV Capital and Newbury Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIV Capital position performs unexpectedly, Newbury Street 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 Newbury Street will offset losses from the drop in Newbury Street's long position.The idea behind LIV Capital Acquisition and Newbury Street Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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