Correlation Between Cheer Holding and LiveOne

Can any of the company-specific risk be diversified away by investing in both Cheer Holding 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 Cheer Holding and LiveOne into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheer Holding and LiveOne, you can compare the effects of market volatilities on Cheer Holding 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 Cheer Holding with a short position of LiveOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheer Holding and LiveOne.

Diversification Opportunities for Cheer Holding and LiveOne

-0.58

Correlation Coefficient

Cheer Holding  LiveOne

Excellent diversification

The 3 months correlation between Cheer and LiveOne is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Cheer Holding 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 Cheer Holding 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 Cheer Holding i.e., Cheer Holding and LiveOne go up and down completely randomly.

Pair Corralation between Cheer Holding and LiveOne

Considering the 90-day investment horizon Cheer Holding is expected to generate 13.88 times less return on investment than LiveOne. But when comparing it to its historical volatility, Cheer Holding is 1.5 times less risky than LiveOne. It trades about 0.03 of its potential returns per unit of risk. LiveOne is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  91.00  in LiveOne on September 24, 2024 and sell it today you would earn a total of  31.00  from holding LiveOne or generate 34.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cheer Holding  vs.  LiveOne

Cheer Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cheer Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Cheer Holding is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

LiveOne

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LiveOne displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheer Holding and LiveOne

The main advantage of trading using opposite Cheer Holding and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheer Holding 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 Cheer Holding 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..