Correlation Between SNM Gobal and LiveOne
Can any of the company-specific risk be diversified away by investing in both SNM Gobal 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 SNM Gobal and LiveOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNM Gobal Holdings and LiveOne, you can compare the effects of market volatilities on SNM Gobal 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 SNM Gobal with a short position of LiveOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNM Gobal and LiveOne.
Diversification Opportunities for SNM Gobal and LiveOne
Very good diversification
The 3 months correlation between SNM and LiveOne is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SNM Gobal Holdings and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and SNM Gobal 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 SNM Gobal Holdings 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 SNM Gobal i.e., SNM Gobal and LiveOne go up and down completely randomly.
Pair Corralation between SNM Gobal and LiveOne
Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 53.22 times more return on investment than LiveOne. However, SNM Gobal is 53.22 times more volatile than LiveOne. It trades about 0.36 of its potential returns per unit of risk. LiveOne is currently generating about 0.14 per unit of risk. If you would invest 0.01 in SNM Gobal Holdings on November 1, 2024 and sell it today you would lose (0.01) from holding SNM Gobal Holdings or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNM Gobal Holdings vs. LiveOne
Performance |
| Timeline |
| SNM Gobal Holdings |
| LiveOne |
SNM Gobal and LiveOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNM Gobal and LiveOne
The main advantage of trading using opposite SNM Gobal and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNM Gobal 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.The idea behind SNM Gobal Holdings and LiveOne pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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