Correlation Between Live Oak and Crossmark Steward
Can any of the company-specific risk be diversified away by investing in both Live Oak and Crossmark Steward 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 Crossmark Steward 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 Crossmark Steward Equity, you can compare the effects of market volatilities on Live Oak and Crossmark Steward 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 Crossmark Steward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Crossmark Steward.
Diversification Opportunities for Live Oak and Crossmark Steward
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Live and Crossmark is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Crossmark Steward Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossmark Steward Equity 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 Crossmark Steward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossmark Steward Equity has no effect on the direction of Live Oak i.e., Live Oak and Crossmark Steward go up and down completely randomly.
Pair Corralation between Live Oak and Crossmark Steward
Assuming the 90 days horizon Live Oak Health is expected to generate 1.66 times more return on investment than Crossmark Steward. However, Live Oak is 1.66 times more volatile than Crossmark Steward Equity. It trades about -0.05 of its potential returns per unit of risk. Crossmark Steward Equity is currently generating about -0.22 per unit of risk. If you would invest 2,241 in Live Oak Health on August 29, 2024 and sell it today you would lose (39.00) from holding Live Oak Health or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Live Oak Health vs. Crossmark Steward Equity
Performance |
| Timeline |
| Live Oak Health |
| Crossmark Steward Equity |
Live Oak and Crossmark Steward Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Crossmark Steward
The main advantage of trading using opposite Live Oak and Crossmark Steward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Crossmark Steward 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 Crossmark Steward will offset losses from the drop in Crossmark Steward's long position.| Live Oak vs. Fidelity Advisor Technology | Live Oak vs. Fidelity Advisor Biotechnology | Live Oak vs. Fidelity Advisor Financial | Live Oak vs. Fidelity Advisor Utilities |
| Crossmark Steward vs. Live Oak Health | Crossmark Steward vs. Prudential Health Sciences | Crossmark Steward vs. Fidelity Advisor Health | Crossmark Steward vs. Health Care Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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