Correlation Between Live Oak and College Retirement
Can any of the company-specific risk be diversified away by investing in both Live Oak and College Retirement 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 College Retirement 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 College Retirement Equities, you can compare the effects of market volatilities on Live Oak and College Retirement 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 College Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and College Retirement.
Diversification Opportunities for Live Oak and College Retirement
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Live and College is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement 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 College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Live Oak i.e., Live Oak and College Retirement go up and down completely randomly.
Pair Corralation between Live Oak and College Retirement
Assuming the 90 days horizon Live Oak Health is expected to generate 0.87 times more return on investment than College Retirement. However, Live Oak Health is 1.15 times less risky than College Retirement. It trades about 0.25 of its potential returns per unit of risk. College Retirement Equities is currently generating about 0.15 per unit of risk. If you would invest 2,051 in Live Oak Health on November 8, 2024 and sell it today you would earn a total of 78.00 from holding Live Oak Health or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. College Retirement Equities
Performance |
| Timeline |
| Live Oak Health |
| College Retirement |
Live Oak and College Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and College Retirement
The main advantage of trading using opposite Live Oak and College Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, College Retirement 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 College Retirement will offset losses from the drop in College Retirement'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 |
| College Retirement vs. Ultra Short Fixed Income | College Retirement vs. Maryland Tax Free Bond | College Retirement vs. Blrc Sgy Mnp | College Retirement vs. T Rowe Price |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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