Correlation Between Live Oak and Sierra Tactical
Can any of the company-specific risk be diversified away by investing in both Live Oak and Sierra Tactical 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 Sierra Tactical 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 Sierra Tactical Municipal, you can compare the effects of market volatilities on Live Oak and Sierra Tactical 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 Sierra Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Sierra Tactical.
Diversification Opportunities for Live Oak and Sierra Tactical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Live and Sierra is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Sierra Tactical Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Tactical Municipal 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 Sierra Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Tactical Municipal has no effect on the direction of Live Oak i.e., Live Oak and Sierra Tactical go up and down completely randomly.
Pair Corralation between Live Oak and Sierra Tactical
Assuming the 90 days horizon Live Oak Health is expected to generate 3.28 times more return on investment than Sierra Tactical. However, Live Oak is 3.28 times more volatile than Sierra Tactical Municipal. It trades about 0.04 of its potential returns per unit of risk. Sierra Tactical Municipal is currently generating about 0.1 per unit of risk. If you would invest 2,021 in Live Oak Health on September 1, 2024 and sell it today you would earn a total of 191.00 from holding Live Oak Health or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Sierra Tactical Municipal
Performance |
| Timeline |
| Live Oak Health |
| Sierra Tactical Municipal |
Live Oak and Sierra Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Sierra Tactical
The main advantage of trading using opposite Live Oak and Sierra Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Sierra Tactical 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 Sierra Tactical will offset losses from the drop in Sierra Tactical'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 |
| Sierra Tactical vs. Nuveen High Yield | Sierra Tactical vs. Nuveen High Yield | Sierra Tactical vs. Nuveen High Yield | Sierra Tactical vs. Nuveen High Yield |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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