Correlation Between Live Oak and Vanguard 500
Can any of the company-specific risk be diversified away by investing in both Live Oak and Vanguard 500 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 Vanguard 500 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 Vanguard 500 Index, you can compare the effects of market volatilities on Live Oak and Vanguard 500 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 Vanguard 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Vanguard 500.
Diversification Opportunities for Live Oak and Vanguard 500
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Vanguard 500 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 500 Index 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 Vanguard 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard 500 Index has no effect on the direction of Live Oak i.e., Live Oak and Vanguard 500 go up and down completely randomly.
Pair Corralation between Live Oak and Vanguard 500
Assuming the 90 days horizon Live Oak Health is expected to under-perform the Vanguard 500. But the mutual fund apears to be less risky and, when comparing its historical volatility, Live Oak Health is 1.11 times less risky than Vanguard 500. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Vanguard 500 Index is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 26,493 in Vanguard 500 Index on October 30, 2024 and sell it today you would earn a total of 2,942 from holding Vanguard 500 Index or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Vanguard 500 Index
Performance |
| Timeline |
| Live Oak Health |
| Vanguard 500 Index |
Live Oak and Vanguard 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Vanguard 500
The main advantage of trading using opposite Live Oak and Vanguard 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Vanguard 500 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 Vanguard 500 will offset losses from the drop in Vanguard 500'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 |
| Vanguard 500 vs. Columbia Global Technology | Vanguard 500 vs. Icon Information Technology | Vanguard 500 vs. Technology Ultrasector Profund | Vanguard 500 vs. Firsthand Technology Opportunities |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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