Correlation Between Live Oak and Aqr International
Can any of the company-specific risk be diversified away by investing in both Live Oak and Aqr International 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 Aqr International 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 Aqr International Defensive, you can compare the effects of market volatilities on Live Oak and Aqr International 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 Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Aqr International.
Diversification Opportunities for Live Oak and Aqr International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LIVE and Aqr is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Live Oak i.e., Live Oak and Aqr International go up and down completely randomly.
Pair Corralation between Live Oak and Aqr International
Assuming the 90 days horizon Live Oak Health is expected to generate 1.54 times more return on investment than Aqr International. However, Live Oak is 1.54 times more volatile than Aqr International Defensive. It trades about 0.08 of its potential returns per unit of risk. Aqr International Defensive is currently generating about -0.2 per unit of risk. If you would invest 2,166 in Live Oak Health on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Live Oak Health or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Aqr International Defensive
Performance |
| Timeline |
| Live Oak Health |
| Aqr International |
Live Oak and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Aqr International
The main advantage of trading using opposite Live Oak and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Aqr International 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 Aqr International will offset losses from the drop in Aqr International'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 |
| Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr International Defensive | Aqr International vs. Aqr Long Short Equity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Transaction History View history of all your transactions and understand their impact on performance |