Correlation Between Live Oak and Highland Long/short
Can any of the company-specific risk be diversified away by investing in both Live Oak and Highland Long/short 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 Highland Long/short 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Live Oak and Highland Long/short 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 Highland Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Highland Long/short.
Diversification Opportunities for Live Oak and Highland Long/short
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and Highland is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Long/short 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 Highland Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Long/short has no effect on the direction of Live Oak i.e., Live Oak and Highland Long/short go up and down completely randomly.
Pair Corralation between Live Oak and Highland Long/short
Assuming the 90 days horizon Live Oak Health is expected to generate 4.23 times more return on investment than Highland Long/short. However, Live Oak is 4.23 times more volatile than Highland Longshort Healthcare. It trades about 0.09 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.08 per unit of risk. If you would invest 2,166 in Live Oak Health on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Live Oak Health or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Live Oak Health |
| Highland Long/short |
Live Oak and Highland Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Highland Long/short
The main advantage of trading using opposite Live Oak and Highland Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Highland Long/short 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 Highland Long/short will offset losses from the drop in Highland Long/short's long position.| Live Oak vs. Fidelity Advisor Technology | Live Oak vs. Fidelity Advisor Biotechnology | Live Oak vs. Fidelity Advisor Financial | Live Oak vs. Fidelity Advisor Utilities |
| Highland Long/short vs. The Merger Fund | Highland Long/short vs. The Arbitrage Fund | Highland Long/short vs. HUMANA INC | Highland Long/short vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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