Correlation Between Live Oak and Income Fund
Can any of the company-specific risk be diversified away by investing in both Live Oak and Income Fund 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 Income Fund 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 Income Fund Income, you can compare the effects of market volatilities on Live Oak and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Income Fund.
Diversification Opportunities for Live Oak and Income Fund
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Income is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of Live Oak i.e., Live Oak and Income Fund go up and down completely randomly.
Pair Corralation between Live Oak and Income Fund
Assuming the 90 days horizon Live Oak is expected to generate 1.57 times less return on investment than Income Fund. In addition to that, Live Oak is 2.07 times more volatile than Income Fund Income. It trades about 0.02 of its total potential returns per unit of risk. Income Fund Income is currently generating about 0.05 per unit of volatility. If you would invest 1,071 in Income Fund Income on September 3, 2024 and sell it today you would earn a total of 93.00 from holding Income Fund Income or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Income Fund Income
Performance |
| Timeline |
| Live Oak Health |
| Income Fund Income |
Live Oak and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Income Fund
The main advantage of trading using opposite Live Oak and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Live Oak vs. Vanguard Health Care | Live Oak vs. Vanguard Health Care | Live Oak vs. T Rowe Price | Live Oak vs. T Rowe Price |
| Income Fund vs. Arrow Managed Futures | Income Fund vs. Mondrian Emerging Markets | Income Fund vs. T Rowe Price | Income Fund vs. The Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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