Correlation Between Science Technology and Live Oak
Can any of the company-specific risk be diversified away by investing in both Science Technology 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 Science Technology and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Technology Fund and Live Oak Health, you can compare the effects of market volatilities on Science Technology 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 Science Technology with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Technology and Live Oak.
Diversification Opportunities for Science Technology and Live Oak
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCIENCE and Live is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Science Technology Fund 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 Science Technology 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 Science Technology Fund 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 Science Technology i.e., Science Technology and Live Oak go up and down completely randomly.
Pair Corralation between Science Technology and Live Oak
Assuming the 90 days horizon Science Technology Fund is expected to generate 1.39 times more return on investment than Live Oak. However, Science Technology is 1.39 times more volatile than Live Oak Health. It trades about 0.31 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.1 per unit of risk. If you would invest 2,838 in Science Technology Fund on September 1, 2024 and sell it today you would earn a total of 256.00 from holding Science Technology Fund or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science Technology Fund vs. Live Oak Health
Performance |
| Timeline |
| Science Technology |
| Live Oak Health |
Science Technology and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Technology and Live Oak
The main advantage of trading using opposite Science Technology and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Technology 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.| Science Technology vs. Aggressive Growth Fund | Science Technology vs. Sp 500 Index | Science Technology vs. Nasdaq 100 Index Fund | Science Technology vs. International Fund International |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |