Correlation Between Live Oak and Transamerica Large
Can any of the company-specific risk be diversified away by investing in both Live Oak and Transamerica Large 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 Transamerica Large 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 Transamerica Large Cap, you can compare the effects of market volatilities on Live Oak and Transamerica Large 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 Transamerica Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Transamerica Large.
Diversification Opportunities for Live Oak and Transamerica Large
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Transamerica is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Cap 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Live Oak i.e., Live Oak and Transamerica Large go up and down completely randomly.
Pair Corralation between Live Oak and Transamerica Large
Assuming the 90 days horizon Live Oak Health is expected to under-perform the Transamerica Large. In addition to that, Live Oak is 1.18 times more volatile than Transamerica Large Cap. It trades about -0.08 of its total potential returns per unit of risk. Transamerica Large Cap is currently generating about 0.15 per unit of volatility. If you would invest 1,471 in Transamerica Large Cap on September 4, 2024 and sell it today you would earn a total of 94.00 from holding Transamerica Large Cap or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Transamerica Large Cap
Performance |
| Timeline |
| Live Oak Health |
| Transamerica Large Cap |
Live Oak and Transamerica Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Transamerica Large
The main advantage of trading using opposite Live Oak and Transamerica Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Transamerica Large 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 Transamerica Large will offset losses from the drop in Transamerica Large'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 |
| Transamerica Large vs. Allianzgi Health Sciences | Transamerica Large vs. Blackrock Health Sciences | Transamerica Large vs. Alger Health Sciences | Transamerica Large vs. Live Oak Health |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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