Correlation Between Live Oak and Hussman Strategic
Can any of the company-specific risk be diversified away by investing in both Live Oak and Hussman Strategic 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 Hussman Strategic 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 Hussman Strategic Dividend, you can compare the effects of market volatilities on Live Oak and Hussman Strategic 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 Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Hussman Strategic.
Diversification Opportunities for Live Oak and Hussman Strategic
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Hussman is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Hussman Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic 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 Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic has no effect on the direction of Live Oak i.e., Live Oak and Hussman Strategic go up and down completely randomly.
Pair Corralation between Live Oak and Hussman Strategic
Assuming the 90 days horizon Live Oak is expected to generate 3.91 times less return on investment than Hussman Strategic. In addition to that, Live Oak is 4.75 times more volatile than Hussman Strategic Dividend. It trades about 0.01 of its total potential returns per unit of risk. Hussman Strategic Dividend is currently generating about 0.16 per unit of volatility. If you would invest 847.00 in Hussman Strategic Dividend on August 30, 2024 and sell it today you would earn a total of 113.00 from holding Hussman Strategic Dividend or generate 13.34% 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. Hussman Strategic Dividend
Performance |
| Timeline |
| Live Oak Health |
| Hussman Strategic |
Live Oak and Hussman Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Hussman Strategic
The main advantage of trading using opposite Live Oak and Hussman Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Hussman Strategic 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 Hussman Strategic will offset losses from the drop in Hussman Strategic'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 |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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