Correlation Between Network Media and LiveOne
Can any of the company-specific risk be diversified away by investing in both Network Media and LiveOne 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 Network Media and LiveOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network Media Group and LiveOne, you can compare the effects of market volatilities on Network Media and LiveOne 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 Network Media with a short position of LiveOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and LiveOne.
Diversification Opportunities for Network Media and LiveOne
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Network and LiveOne is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Network Media 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 Network Media Group are associated (or correlated) with LiveOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveOne has no effect on the direction of Network Media i.e., Network Media and LiveOne go up and down completely randomly.
Pair Corralation between Network Media and LiveOne
Assuming the 90 days horizon Network Media Group is expected to under-perform the LiveOne. In addition to that, Network Media is 1.39 times more volatile than LiveOne. It trades about -0.08 of its total potential returns per unit of risk. LiveOne is currently generating about 0.2 per unit of volatility. If you would invest 77.00 in LiveOne on September 2, 2024 and sell it today you would earn a total of 23.00 from holding LiveOne or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Network Media Group vs. LiveOne
Performance |
| Timeline |
| Network Media Group |
| LiveOne |
Network Media and LiveOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network Media and LiveOne
The main advantage of trading using opposite Network Media and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network Media position performs unexpectedly, LiveOne 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 LiveOne will offset losses from the drop in LiveOne's long position.| Network Media vs. New Wave Holdings | Network Media vs. ZoomerMedia Limited | Network Media vs. OverActive Media Corp | Network Media vs. Celtic plc |
| LiveOne vs. Reading International B | LiveOne vs. Marcus | LiveOne vs. Reading International | LiveOne vs. News Corp B |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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