Correlation Between Live Ventures and Tile Shop
Can any of the company-specific risk be diversified away by investing in both Live Ventures and Tile Shop 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 Tile Shop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Tile Shop Holdings, you can compare the effects of market volatilities on Live Ventures and Tile Shop 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 Tile Shop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Tile Shop.
Diversification Opportunities for Live Ventures and Tile Shop
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and Tile is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Tile Shop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tile Shop Holdings 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 Tile Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tile Shop Holdings has no effect on the direction of Live Ventures i.e., Live Ventures and Tile Shop go up and down completely randomly.
Pair Corralation between Live Ventures and Tile Shop
Given the investment horizon of 90 days Live Ventures is expected to under-perform the Tile Shop. In addition to that, Live Ventures is 1.7 times more volatile than Tile Shop Holdings. It trades about -0.05 of its total potential returns per unit of risk. Tile Shop Holdings is currently generating about 0.01 per unit of volatility. If you would invest 650.00 in Tile Shop Holdings on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Tile Shop Holdings or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Tile Shop Holdings
Performance |
| Timeline |
| Live Ventures |
| Tile Shop Holdings |
Live Ventures and Tile Shop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Tile Shop
The main advantage of trading using opposite Live Ventures and Tile Shop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, Tile Shop 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 Tile Shop will offset losses from the drop in Tile Shop'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 |
| Tile Shop vs. Kingfisher PLC ADR | Tile Shop vs. Haverty Furniture Companies | Tile Shop vs. Arhaus Inc | Tile Shop vs. Kirklands |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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