Correlation Between Live Oak and Jensen Quality
Can any of the company-specific risk be diversified away by investing in both Live Oak and Jensen Quality 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 Jensen Quality 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 Jensen Quality Value, you can compare the effects of market volatilities on Live Oak and Jensen Quality 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 Jensen Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Jensen Quality.
Diversification Opportunities for Live Oak and Jensen Quality
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Jensen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Jensen Quality Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Quality Value 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 Jensen Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Quality Value has no effect on the direction of Live Oak i.e., Live Oak and Jensen Quality go up and down completely randomly.
Pair Corralation between Live Oak and Jensen Quality
Assuming the 90 days horizon Live Oak Health is expected to under-perform the Jensen Quality. But the mutual fund apears to be less risky and, when comparing its historical volatility, Live Oak Health is 1.12 times less risky than Jensen Quality. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Jensen Quality Value is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,435 in Jensen Quality Value on September 13, 2024 and sell it today you would earn a total of 522.00 from holding Jensen Quality Value or generate 36.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Live Oak Health vs. Jensen Quality Value
Performance |
| Timeline |
| Live Oak Health |
| Jensen Quality Value |
Live Oak and Jensen Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Jensen Quality
The main advantage of trading using opposite Live Oak and Jensen Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Jensen Quality 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 Jensen Quality will offset losses from the drop in Jensen Quality'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 |
| Jensen Quality vs. Blackrock Health Sciences | Jensen Quality vs. Baillie Gifford Health | Jensen Quality vs. Alger Health Sciences | Jensen Quality 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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