Correlation Between Fossil and Live Ventures

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

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

Diversification Opportunities for Fossil and Live Ventures

0.05

Correlation Coefficient

Fossil  Live Ventures

Significant diversification

The 3 months correlation between Fossil and Live is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and Fossil 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 Fossil Group are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of Fossil i.e., Fossil and Live Ventures go up and down completely randomly.

Pair Corralation between Fossil and Live Ventures

Given the investment horizon of 90 days Fossil Group is expected to under-perform the Live Ventures. In addition to that, Fossil is 1.25 times more volatile than Live Ventures. It trades about -0.17 of its total potential returns per unit of risk. Live Ventures is currently generating about -0.2 per unit of volatility. If you would invest  954.00  in Live Ventures on November 28, 2024 and sell it today you would lose (142.00) from holding Live Ventures or give up 14.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fossil Group  vs.  Live Ventures

Fossil Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fossil Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Fossil disclosed solid returns over the last few months and may actually be approaching a breakup point.

Live Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Live Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Fossil and Live Ventures

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

The idea behind Fossil Group and Live Ventures 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.