Correlation Between Live Oak and Absolute Capital
Can any of the company-specific risk be diversified away by investing in both Live Oak and Absolute Capital 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 Oak and Absolute Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Absolute Capital Asset, you can compare the effects of market volatilities on Live Oak and Absolute Capital 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 Oak with a short position of Absolute Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Absolute Capital.
Diversification Opportunities for Live Oak and Absolute Capital
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Absolute is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Absolute Capital Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Capital Asset and Live Oak 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 Oak Health are associated (or correlated) with Absolute Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Capital Asset has no effect on the direction of Live Oak i.e., Live Oak and Absolute Capital go up and down completely randomly.
Pair Corralation between Live Oak and Absolute Capital
Assuming the 90 days horizon Live Oak Health is expected to under-perform the Absolute Capital. In addition to that, Live Oak is 1.26 times more volatile than Absolute Capital Asset. It trades about 0.0 of its total potential returns per unit of risk. Absolute Capital Asset is currently generating about 0.09 per unit of volatility. If you would invest 1,066 in Absolute Capital Asset on September 14, 2024 and sell it today you would earn a total of 154.00 from holding Absolute Capital Asset or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Absolute Capital Asset
Performance |
| Timeline |
| Live Oak Health |
| Absolute Capital Asset |
Live Oak and Absolute Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Absolute Capital
The main advantage of trading using opposite Live Oak and Absolute Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Absolute Capital 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 Absolute Capital will offset losses from the drop in Absolute Capital's long position.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Absolute Capital vs. Us High Relative | Absolute Capital vs. Ppm High Yield | Absolute Capital vs. Pace High Yield | Absolute Capital vs. Ab High Income |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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