Correlation Between Live Oak and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Live Oak and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Munications, you can compare the effects of market volatilities on Live Oak and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Columbia Seligman.
Diversification Opportunities for Live Oak and Columbia Seligman
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LIVE and Columbia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Columbia Seligman Munications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman has no effect on the direction of Live Oak i.e., Live Oak and Columbia Seligman go up and down completely randomly.
Pair Corralation between Live Oak and Columbia Seligman
Assuming the 90 days horizon Live Oak is expected to generate 4.23 times less return on investment than Columbia Seligman. But when comparing it to its historical volatility, Live Oak Health is 1.82 times less risky than Columbia Seligman. It trades about 0.02 of its potential returns per unit of risk. Columbia Seligman Munications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,719 in Columbia Seligman Munications on November 27, 2024 and sell it today you would earn a total of 4,205 from holding Columbia Seligman Munications or generate 39.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Columbia Seligman Munications
Performance |
| Timeline |
| Live Oak Health |
| Columbia Seligman |
Live Oak and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Columbia Seligman
The main advantage of trading using opposite Live Oak and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman'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 |
| Columbia Seligman vs. Madison Diversified Income | Columbia Seligman vs. Blackrock Diversified Fixed | Columbia Seligman vs. Diversified Bond Fund | Columbia Seligman vs. Global Diversified Income |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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