Correlation Between Live Oak and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Live Oak and Growth Allocation 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 Growth Allocation 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 Growth Allocation Fund, you can compare the effects of market volatilities on Live Oak and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Growth Allocation.
Diversification Opportunities for Live Oak and Growth Allocation
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Growth is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Live Oak i.e., Live Oak and Growth Allocation go up and down completely randomly.
Pair Corralation between Live Oak and Growth Allocation
Assuming the 90 days horizon Live Oak is expected to generate 6.24 times less return on investment than Growth Allocation. In addition to that, Live Oak is 1.29 times more volatile than Growth Allocation Fund. It trades about 0.01 of its total potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.09 per unit of volatility. If you would invest 1,032 in Growth Allocation Fund on October 28, 2024 and sell it today you would earn a total of 274.00 from holding Growth Allocation Fund or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Growth Allocation Fund
Performance |
| Timeline |
| Live Oak Health |
| Growth Allocation |
Live Oak and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Growth Allocation
The main advantage of trading using opposite Live Oak and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation'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 |
| Growth Allocation vs. T Rowe Price | Growth Allocation vs. Blrc Sgy Mnp | Growth Allocation vs. Bbh Intermediate Municipal | Growth Allocation vs. Franklin Government Money |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |