Correlation Between Live Ventures and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Dow Jones Industrial, you can compare the effects of market volatilities on Live Ventures and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Dow Jones.
Diversification Opportunities for Live Ventures and Dow Jones
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Dow is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Live Ventures i.e., Live Ventures and Dow Jones go up and down completely randomly.
Pair Corralation between Live Ventures and Dow Jones
Given the investment horizon of 90 days Live Ventures is expected to generate 1.22 times less return on investment than Dow Jones. In addition to that, Live Ventures is 3.55 times more volatile than Dow Jones Industrial. It trades about 0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of volatility. If you would invest 4,263,520 in Dow Jones Industrial on November 9, 2024 and sell it today you would earn a total of 211,243 from holding Dow Jones Industrial or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Dow Jones Industrial
Performance |
| Timeline |
Live Ventures and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Live Ventures
Pair trading matchups for Live Ventures
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Live Ventures and Dow Jones
The main advantage of trading using opposite Live Ventures and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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