Correlation Between Live Ventures and Jackpot Digital
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Jackpot Digital 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 Jackpot Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Jackpot Digital, you can compare the effects of market volatilities on Live Ventures and Jackpot Digital 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 Jackpot Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Jackpot Digital.
Diversification Opportunities for Live Ventures and Jackpot Digital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Jackpot is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Jackpot Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackpot Digital 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 Jackpot Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackpot Digital has no effect on the direction of Live Ventures i.e., Live Ventures and Jackpot Digital go up and down completely randomly.
Pair Corralation between Live Ventures and Jackpot Digital
Given the investment horizon of 90 days Live Ventures is expected to under-perform the Jackpot Digital. But the stock apears to be less risky and, when comparing its historical volatility, Live Ventures is 1.98 times less risky than Jackpot Digital. The stock trades about -0.04 of its potential returns per unit of risk. The Jackpot Digital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.21 in Jackpot Digital on September 4, 2024 and sell it today you would lose (0.51) from holding Jackpot Digital or give up 12.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Jackpot Digital
Performance |
| Timeline |
| Live Ventures |
| Jackpot Digital |
Live Ventures and Jackpot Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Jackpot Digital
The main advantage of trading using opposite Live Ventures and Jackpot Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Jackpot Digital 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 Jackpot Digital will offset losses from the drop in Jackpot Digital's long position.| Live Ventures vs. Api Group Corp | Live Ventures vs. MYR Group | Live Ventures vs. Comfort Systems USA | Live Ventures vs. Arcosa Inc |
| Jackpot Digital vs. Intema Solutions | Jackpot Digital vs. 888 Holdings | Jackpot Digital vs. Royal Wins | Jackpot Digital vs. Churchill Downs Incorporated |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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