Correlation Between Live Oak and Health Biotchnology
Can any of the company-specific risk be diversified away by investing in both Live Oak and Health Biotchnology 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 Health Biotchnology 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 Health Biotchnology Portfolio, you can compare the effects of market volatilities on Live Oak and Health Biotchnology 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 Health Biotchnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Health Biotchnology.
Diversification Opportunities for Live Oak and Health Biotchnology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Live and Health is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Health Biotchnology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Biotchnology 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 Health Biotchnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Biotchnology has no effect on the direction of Live Oak i.e., Live Oak and Health Biotchnology go up and down completely randomly.
Pair Corralation between Live Oak and Health Biotchnology
Assuming the 90 days horizon Live Oak Health is expected to generate 0.94 times more return on investment than Health Biotchnology. However, Live Oak Health is 1.07 times less risky than Health Biotchnology. It trades about 0.0 of its potential returns per unit of risk. Health Biotchnology Portfolio is currently generating about -0.01 per unit of risk. If you would invest 2,181 in Live Oak Health on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Live Oak Health or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Health Biotchnology Portfolio
Performance |
| Timeline |
| Live Oak Health |
| Health Biotchnology |
Live Oak and Health Biotchnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Health Biotchnology
The main advantage of trading using opposite Live Oak and Health Biotchnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Health Biotchnology 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 Health Biotchnology will offset losses from the drop in Health Biotchnology'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 |
| Health Biotchnology vs. Quantitative Longshort Equity | Health Biotchnology vs. Issachar Fund Class | Health Biotchnology vs. Growth Income Fund | Health Biotchnology vs. Omni Small Cap Value |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |