Correlation Between Live Oak and Alger Weatherbie
Can any of the company-specific risk be diversified away by investing in both Live Oak and Alger Weatherbie 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 Alger Weatherbie 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 Alger Weatherbie Specialized, you can compare the effects of market volatilities on Live Oak and Alger Weatherbie 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 Alger Weatherbie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Alger Weatherbie.
Diversification Opportunities for Live Oak and Alger Weatherbie
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between LIVE and Alger is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Alger Weatherbie Specialized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Weatherbie Spe 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 Alger Weatherbie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Weatherbie Spe has no effect on the direction of Live Oak i.e., Live Oak and Alger Weatherbie go up and down completely randomly.
Pair Corralation between Live Oak and Alger Weatherbie
Assuming the 90 days horizon Live Oak is expected to generate 8.3 times less return on investment than Alger Weatherbie. But when comparing it to its historical volatility, Live Oak Health is 1.7 times less risky than Alger Weatherbie. It trades about 0.05 of its potential returns per unit of risk. Alger Weatherbie Specialized is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,412 in Alger Weatherbie Specialized on August 24, 2024 and sell it today you would earn a total of 126.00 from holding Alger Weatherbie Specialized or generate 8.92% 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. Alger Weatherbie Specialized
Performance |
| Timeline |
| Live Oak Health |
| Alger Weatherbie Spe |
Live Oak and Alger Weatherbie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Alger Weatherbie
The main advantage of trading using opposite Live Oak and Alger Weatherbie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Alger Weatherbie 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 Alger Weatherbie will offset losses from the drop in Alger Weatherbie'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 |
| Alger Weatherbie vs. Alger Health Sciences | Alger Weatherbie vs. Live Oak Health | Alger Weatherbie vs. Baron Health Care | Alger Weatherbie vs. Eventide Healthcare Life |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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