Correlation Between Live Oak and Catholic Values
Can any of the company-specific risk be diversified away by investing in both Live Oak and Catholic Values 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 Catholic Values 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 Catholic Values Fixed, you can compare the effects of market volatilities on Live Oak and Catholic Values 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 Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Catholic Values.
Diversification Opportunities for Live Oak and Catholic Values
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Catholic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed 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 Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Live Oak i.e., Live Oak and Catholic Values go up and down completely randomly.
Pair Corralation between Live Oak and Catholic Values
Assuming the 90 days horizon Live Oak Health is expected to generate 2.6 times more return on investment than Catholic Values. However, Live Oak is 2.6 times more volatile than Catholic Values Fixed. It trades about 0.1 of its potential returns per unit of risk. Catholic Values Fixed is currently generating about 0.1 per unit of risk. If you would invest 2,168 in Live Oak Health on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Live Oak Health or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Live Oak Health vs. Catholic Values Fixed
Performance |
| Timeline |
| Live Oak Health |
| Catholic Values Fixed |
Live Oak and Catholic Values Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Catholic Values
The main advantage of trading using opposite Live Oak and Catholic Values positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Catholic Values 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 Catholic Values will offset losses from the drop in Catholic Values' 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 |
| Catholic Values vs. The Hartford Healthcare | Catholic Values vs. Baillie Gifford Health | Catholic Values vs. Health Biotchnology Portfolio | Catholic Values vs. Live Oak Health |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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