Correlation Between Live Ventures and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Melbana Energy 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 Melbana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Melbana Energy Limited, you can compare the effects of market volatilities on Live Ventures and Melbana Energy 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 Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Melbana Energy.
Diversification Opportunities for Live Ventures and Melbana Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Live and Melbana is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy 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 Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of Live Ventures i.e., Live Ventures and Melbana Energy go up and down completely randomly.
Pair Corralation between Live Ventures and Melbana Energy
Given the investment horizon of 90 days Live Ventures is expected to generate 0.13 times more return on investment than Melbana Energy. However, Live Ventures is 7.61 times less risky than Melbana Energy. It trades about -0.11 of its potential returns per unit of risk. Melbana Energy Limited is currently generating about -0.32 per unit of risk. If you would invest 1,016 in Live Ventures on October 15, 2024 and sell it today you would lose (61.00) from holding Live Ventures or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Melbana Energy Limited
Performance |
| Timeline |
| Live Ventures |
| Melbana Energy |
Live Ventures and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Melbana Energy
The main advantage of trading using opposite Live Ventures and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Melbana Energy 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 Melbana Energy will offset losses from the drop in Melbana Energy'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 |
| Melbana Energy vs. Grupo Simec SAB | Melbana Energy vs. ArcelorMittal SA ADR | Melbana Energy vs. Live Ventures | Melbana Energy vs. InfuSystems Holdings |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |