Correlation Between Live Oak and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Live Oak and Pro Blend 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 Pro Blend 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 Pro Blend Maximum Term, you can compare the effects of market volatilities on Live Oak and Pro Blend 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 Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Pro Blend.
Diversification Opportunities for Live Oak and Pro Blend
Good diversification
The 3 months correlation between Live and Pro is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Maximum 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 Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Maximum has no effect on the direction of Live Oak i.e., Live Oak and Pro Blend go up and down completely randomly.
Pair Corralation between Live Oak and Pro Blend
Assuming the 90 days horizon Live Oak is expected to generate 31.36 times less return on investment than Pro Blend. In addition to that, Live Oak is 1.28 times more volatile than Pro Blend Maximum Term. It trades about 0.0 of its total potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.13 per unit of volatility. If you would invest 2,508 in Pro Blend Maximum Term on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Pro Blend Maximum Term or generate 9.97% 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. Pro Blend Maximum Term
Performance |
| Timeline |
| Live Oak Health |
| Pro Blend Maximum |
Live Oak and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Pro Blend
The main advantage of trading using opposite Live Oak and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend'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 |
| Pro Blend vs. Western Asset Inflation | Pro Blend vs. Arrow Managed Futures | Pro Blend vs. Aqr Managed Futures | Pro Blend vs. American Funds Inflation |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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