Correlation Between NYSE Composite and LIV Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and LIV Capital 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 NYSE Composite and LIV Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and LIV Capital Acquisition, you can compare the effects of market volatilities on NYSE Composite and LIV Capital 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 NYSE Composite with a short position of LIV Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and LIV Capital.
Diversification Opportunities for NYSE Composite and LIV Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and LIV is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and LIV Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIV Capital Acquisition and NYSE Composite 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 NYSE Composite are associated (or correlated) with LIV Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIV Capital Acquisition has no effect on the direction of NYSE Composite i.e., NYSE Composite and LIV Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and LIV Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.48 times more return on investment than LIV Capital. However, NYSE Composite is 5.48 times more volatile than LIV Capital Acquisition. It trades about 0.08 of its potential returns per unit of risk. LIV Capital Acquisition is currently generating about 0.19 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.79% |
| Values | Daily Returns |
NYSE Composite vs. LIV Capital Acquisition
Performance |
| Timeline |
NYSE Composite and LIV Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
LIV Capital Acquisition
Pair trading matchups for LIV Capital
Pair Trading with NYSE Composite and LIV Capital
The main advantage of trading using opposite NYSE Composite and LIV Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, LIV Capital 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 LIV Capital will offset losses from the drop in LIV Capital's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| LIV Capital vs. IX Acquisition Corp | LIV Capital vs. LatAmGrowth SPAC | LIV Capital vs. Portage Fintech Acquisition | LIV Capital vs. Swiftmerge Acquisition Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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