Correlation Between Live Oak and Pimco Preferred
Can any of the company-specific risk be diversified away by investing in both Live Oak and Pimco Preferred 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 Pimco Preferred 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 Pimco Preferred And, you can compare the effects of market volatilities on Live Oak and Pimco Preferred 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 Pimco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Pimco Preferred.
Diversification Opportunities for Live Oak and Pimco Preferred
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LIVE and Pimco is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And 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 Pimco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Live Oak i.e., Live Oak and Pimco Preferred go up and down completely randomly.
Pair Corralation between Live Oak and Pimco Preferred
Assuming the 90 days horizon Live Oak Health is expected to generate 7.07 times more return on investment than Pimco Preferred. However, Live Oak is 7.07 times more volatile than Pimco Preferred And. It trades about 0.08 of its potential returns per unit of risk. Pimco Preferred And is currently generating about -0.11 per unit of risk. If you would invest 2,166 in Live Oak Health on August 28, 2024 and sell it today you would earn a total of 32.00 from holding Live Oak Health or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Pimco Preferred And
Performance |
| Timeline |
| Live Oak Health |
| Pimco Preferred And |
Live Oak and Pimco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Pimco Preferred
The main advantage of trading using opposite Live Oak and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Pimco Preferred 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 Pimco Preferred will offset losses from the drop in Pimco Preferred'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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