Correlation Between Live Oak and Alphacentric Lifesci
Can any of the company-specific risk be diversified away by investing in both Live Oak and Alphacentric Lifesci 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 Alphacentric Lifesci 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 Alphacentric Lifesci Healthcare, you can compare the effects of market volatilities on Live Oak and Alphacentric Lifesci 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 Alphacentric Lifesci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Alphacentric Lifesci.
Diversification Opportunities for Live Oak and Alphacentric Lifesci
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Alphacentric is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Alphacentric Lifesci Healthcar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Lifesci 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 Alphacentric Lifesci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Lifesci has no effect on the direction of Live Oak i.e., Live Oak and Alphacentric Lifesci go up and down completely randomly.
Pair Corralation between Live Oak and Alphacentric Lifesci
Assuming the 90 days horizon Live Oak is expected to generate 1.66 times less return on investment than Alphacentric Lifesci. But when comparing it to its historical volatility, Live Oak Health is 1.42 times less risky than Alphacentric Lifesci. It trades about 0.06 of its potential returns per unit of risk. Alphacentric Lifesci Healthcare is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,204 in Alphacentric Lifesci Healthcare on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Alphacentric Lifesci Healthcare or generate 9.05% 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. Alphacentric Lifesci Healthcar
Performance |
| Timeline |
| Live Oak Health |
| Alphacentric Lifesci |
Live Oak and Alphacentric Lifesci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Alphacentric Lifesci
The main advantage of trading using opposite Live Oak and Alphacentric Lifesci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Alphacentric Lifesci 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 Alphacentric Lifesci will offset losses from the drop in Alphacentric Lifesci'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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