Correlation Between NYSE Composite and Live Ventures
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Live Ventures 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 Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Live Ventures, you can compare the effects of market volatilities on NYSE Composite and Live Ventures 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 Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Live Ventures.
Diversification Opportunities for NYSE Composite and Live Ventures
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Live is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures 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 Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of NYSE Composite i.e., NYSE Composite and Live Ventures go up and down completely randomly.
Pair Corralation between NYSE Composite and Live Ventures
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.22 times more return on investment than Live Ventures. However, NYSE Composite is 4.58 times less risky than Live Ventures. It trades about 0.07 of its potential returns per unit of risk. Live Ventures is currently generating about -0.06 per unit of risk. If you would invest 1,591,069 in NYSE Composite on November 1, 2024 and sell it today you would earn a total of 401,678 from holding NYSE Composite or generate 25.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Live Ventures
Performance |
| Timeline |
NYSE Composite and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Live Ventures
Pair trading matchups for Live Ventures
Pair Trading with NYSE Composite and Live Ventures
The main advantage of trading using opposite NYSE Composite and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Live Ventures 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 Live Ventures will offset losses from the drop in Live Ventures' long position.| NYSE Composite vs. Pembina Pipeline | NYSE Composite vs. Precision Drilling | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Transocean |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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