Correlation Between CLST Holdings and LiveChain

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

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

Diversification Opportunities for CLST Holdings and LiveChain

-0.01

Correlation Coefficient

CLST Holdings  LiveChain

Good diversification

The 3 months correlation between CLST and LiveChain is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CLST Holdings and LiveChain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveChain and CLST Holdings 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 CLST Holdings are associated (or correlated) with LiveChain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveChain has no effect on the direction of CLST Holdings i.e., CLST Holdings and LiveChain go up and down completely randomly.

Pair Corralation between CLST Holdings and LiveChain

Given the investment horizon of 90 days CLST Holdings is expected to under-perform the LiveChain. But the pink sheet apears to be less risky and, when comparing its historical volatility, CLST Holdings is 3.62 times less risky than LiveChain. The pink sheet trades about -0.05 of its potential returns per unit of risk. The LiveChain is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.16  in LiveChain on September 11, 2024 and sell it today you would earn a total of  0.10  from holding LiveChain or generate 62.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CLST Holdings  vs.  LiveChain

CLST Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLST Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

LiveChain

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LiveChain are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, LiveChain demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CLST Holdings and LiveChain

The main advantage of trading using opposite CLST Holdings and LiveChain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLST Holdings position performs unexpectedly, LiveChain 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 LiveChain will offset losses from the drop in LiveChain's long position.

The idea behind CLST Holdings and LiveChain 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.