Correlation Between Pace Large and Live Oak
Can any of the company-specific risk be diversified away by investing in both Pace Large and Live Oak 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 Pace Large and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Large Growth and Live Oak Health, you can compare the effects of market volatilities on Pace Large and Live Oak 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 Pace Large with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Large and Live Oak.
Diversification Opportunities for Pace Large and Live Oak
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pace and Live is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pace Large Growth and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Pace Large 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 Pace Large Growth are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Pace Large i.e., Pace Large and Live Oak go up and down completely randomly.
Pair Corralation between Pace Large and Live Oak
Assuming the 90 days horizon Pace Large is expected to generate 1.79 times less return on investment than Live Oak. But when comparing it to its historical volatility, Pace Large Growth is 1.01 times less risky than Live Oak. It trades about 0.06 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,164 in Live Oak Health on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Live Oak Health or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Large Growth vs. Live Oak Health
Performance |
| Timeline |
| Pace Large Growth |
| Live Oak Health |
Pace Large and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Large and Live Oak
The main advantage of trading using opposite Pace Large and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Large position performs unexpectedly, Live Oak 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 Oak will offset losses from the drop in Live Oak's long position.| Pace Large vs. Live Oak Health | Pace Large vs. The Gabelli Healthcare | Pace Large vs. Deutsche Health And | Pace Large vs. Lord Abbett Health |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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