Correlation Between Live Ventures and Invitation Homes
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Invitation Homes 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 Invitation Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Invitation Homes, you can compare the effects of market volatilities on Live Ventures and Invitation Homes 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 Invitation Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Invitation Homes.
Diversification Opportunities for Live Ventures and Invitation Homes
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Live and Invitation is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Invitation Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invitation Homes 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 Invitation Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invitation Homes has no effect on the direction of Live Ventures i.e., Live Ventures and Invitation Homes go up and down completely randomly.
Pair Corralation between Live Ventures and Invitation Homes
Given the investment horizon of 90 days Live Ventures is expected to generate 2.42 times more return on investment than Invitation Homes. However, Live Ventures is 2.42 times more volatile than Invitation Homes. It trades about 0.08 of its potential returns per unit of risk. Invitation Homes is currently generating about 0.14 per unit of risk. If you would invest 913.00 in Live Ventures on November 9, 2024 and sell it today you would earn a total of 31.00 from holding Live Ventures or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Invitation Homes
Performance |
| Timeline |
| Live Ventures |
| Invitation Homes |
Live Ventures and Invitation Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Invitation Homes
The main advantage of trading using opposite Live Ventures and Invitation Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Invitation Homes 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 Invitation Homes will offset losses from the drop in Invitation Homes' long position.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
| Invitation Homes vs. American Homes 4 | Invitation Homes vs. Mid America Apartment Communities | Invitation Homes vs. Camden Property Trust | Invitation Homes vs. Sun Communities |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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