Correlation Between Live Ventures and Best Buy
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Best Buy 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 Live Ventures and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Best Buy Co, you can compare the effects of market volatilities on Live Ventures and Best Buy 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 Live Ventures with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Best Buy.
Diversification Opportunities for Live Ventures and Best Buy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and Best is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Live Ventures 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 Live Ventures are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Live Ventures i.e., Live Ventures and Best Buy go up and down completely randomly.
Pair Corralation between Live Ventures and Best Buy
Given the investment horizon of 90 days Live Ventures is expected to generate 2.3 times more return on investment than Best Buy. However, Live Ventures is 2.3 times more volatile than Best Buy Co. It trades about 0.0 of its potential returns per unit of risk. Best Buy Co is currently generating about -0.01 per unit of risk. If you would invest 1,013 in Live Ventures on September 18, 2024 and sell it today you would lose (19.00) from holding Live Ventures or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Best Buy Co
Performance |
| Timeline |
| Live Ventures |
| Best Buy |
Live Ventures and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Best Buy
The main advantage of trading using opposite Live Ventures and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
| Best Buy vs. Arhaus Inc | Best Buy vs. Floor Decor Holdings | Best Buy vs. Live Ventures | Best Buy vs. Macys Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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