Correlation Between LiveOne and Sea
Can any of the company-specific risk be diversified away by investing in both LiveOne and Sea 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 LiveOne and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LiveOne and Sea, you can compare the effects of market volatilities on LiveOne and Sea 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 LiveOne with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiveOne and Sea.
Diversification Opportunities for LiveOne and Sea
Pay attention - limited upside
The 3 months correlation between LiveOne and Sea is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and LiveOne 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 LiveOne are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of LiveOne i.e., LiveOne and Sea go up and down completely randomly.
Pair Corralation between LiveOne and Sea
Considering the 90-day investment horizon LiveOne is expected to generate 2.48 times more return on investment than Sea. However, LiveOne is 2.48 times more volatile than Sea. It trades about 0.3 of its potential returns per unit of risk. Sea is currently generating about 0.29 per unit of risk. If you would invest 62.00 in LiveOne on August 30, 2024 and sell it today you would earn a total of 35.00 from holding LiveOne or generate 56.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiveOne vs. Sea
Performance |
| Timeline |
| LiveOne |
| Sea |
LiveOne and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiveOne and Sea
The main advantage of trading using opposite LiveOne and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiveOne position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| LiveOne vs. Reading International B | LiveOne vs. Marcus | LiveOne vs. Reading International | LiveOne vs. News Corp B |
| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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