Correlation Between Grandeur Peak and Live Oak

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

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

Diversification Opportunities for Grandeur Peak and Live Oak

0.28

Correlation Coefficient

Grandeur Peak  Live Oak

Modest diversification

The 3 months correlation between Grandeur and Live is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Grandeur Peak Emerging 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 Grandeur Peak 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 Grandeur Peak Emerging 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 Grandeur Peak i.e., Grandeur Peak and Live Oak go up and down completely randomly.

Pair Corralation between Grandeur Peak and Live Oak

Assuming the 90 days horizon Grandeur Peak Emerging is expected to under-perform the Live Oak. But the mutual fund apears to be less risky and, when comparing its historical volatility, Grandeur Peak Emerging is 1.03 times less risky than Live Oak. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Live Oak Health is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,142  in Live Oak Health on September 16, 2024 and sell it today you would lose (20.00) from holding Live Oak Health or give up 0.93% of portfolio value over 90 days.

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

Grandeur Peak Emerging  vs.  Live Oak Health

Grandeur Peak Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grandeur Peak Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Grandeur Peak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Live Oak Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Oak Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Grandeur Peak and Live Oak

The main advantage of trading using opposite Grandeur Peak and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grandeur Peak 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.

The idea behind Grandeur Peak Emerging and Live Oak Health 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.