Correlation Between Live Ventures and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Nextplat Corp 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 Nextplat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Nextplat Corp, you can compare the effects of market volatilities on Live Ventures and Nextplat Corp 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Nextplat Corp.
Diversification Opportunities for Live Ventures and Nextplat Corp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Nextplat is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Live Ventures i.e., Live Ventures and Nextplat Corp go up and down completely randomly.
Pair Corralation between Live Ventures and Nextplat Corp
Given the investment horizon of 90 days Live Ventures is expected to generate 0.52 times more return on investment than Nextplat Corp. However, Live Ventures is 1.92 times less risky than Nextplat Corp. It trades about -0.1 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.12 per unit of risk. If you would invest 1,044 in Live Ventures on August 31, 2024 and sell it today you would lose (100.00) from holding Live Ventures or give up 9.58% 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. Nextplat Corp
Performance |
| Timeline |
| Live Ventures |
| Nextplat Corp |
Live Ventures and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Nextplat Corp
The main advantage of trading using opposite Live Ventures and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kingfisher plc |
| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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