Correlation Between Live Oak and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Live Oak and Pacific Funds 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 Pacific Funds 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 Pacific Funds Portfolio, you can compare the effects of market volatilities on Live Oak and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Pacific Funds.
Diversification Opportunities for Live Oak and Pacific Funds
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Pacific is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Pacific Funds Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Portfolio 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Portfolio has no effect on the direction of Live Oak i.e., Live Oak and Pacific Funds go up and down completely randomly.
Pair Corralation between Live Oak and Pacific Funds
Assuming the 90 days horizon Live Oak is expected to generate 2.24 times less return on investment than Pacific Funds. In addition to that, Live Oak is 1.89 times more volatile than Pacific Funds Portfolio. It trades about 0.02 of its total potential returns per unit of risk. Pacific Funds Portfolio is currently generating about 0.1 per unit of volatility. If you would invest 901.00 in Pacific Funds Portfolio on September 12, 2024 and sell it today you would earn a total of 141.00 from holding Pacific Funds Portfolio or generate 15.65% 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. Pacific Funds Portfolio
Performance |
| Timeline |
| Live Oak Health |
| Pacific Funds Portfolio |
Live Oak and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Pacific Funds
The main advantage of trading using opposite Live Oak and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' 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 |
| Pacific Funds vs. Vanguard Wellesley Income | Pacific Funds vs. Vanguard Wellesley Income | Pacific Funds vs. Blackrock Multi Asset Income | Pacific Funds vs. The Hartford Balanced |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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