Correlation Between International Business and Live Ventures

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

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

Diversification Opportunities for International Business and Live Ventures

-0.41

Correlation Coefficient

International Business  Live Ventures

Very good diversification

The 3 months correlation between International and Live is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and International Business 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 International Business Machines 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 International Business i.e., International Business and Live Ventures go up and down completely randomly.

Pair Corralation between International Business and Live Ventures

Considering the 90-day investment horizon International Business Machines is expected to generate 0.38 times more return on investment than Live Ventures. However, International Business Machines is 2.65 times less risky than Live Ventures. It trades about 0.1 of its potential returns per unit of risk. Live Ventures is currently generating about -0.06 per unit of risk. If you would invest  12,521  in International Business Machines on October 27, 2024 and sell it today you would earn a total of  9,959  from holding International Business Machines or generate 79.54% return on investment over 90 days.

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

International Business Machine  vs.  Live Ventures

International Business

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, International Business may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Live Ventures

Risk-Adjusted Performance

0 of 100

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 rather sound basic indicators, Live Ventures is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with International Business and Live Ventures

The main advantage of trading using opposite International Business and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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 International Business Machines 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.