Correlation Between Live Ventures and HP

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

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

Diversification Opportunities for Live Ventures and HP

-0.72

Correlation Coefficient

Live Ventures  HP

Pay attention - limited upside

The 3 months correlation between Live and HP is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc and Live Ventures 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 Live Ventures are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Live Ventures i.e., Live Ventures and HP go up and down completely randomly.

Pair Corralation between Live Ventures and HP

Given the investment horizon of 90 days Live Ventures is expected to under-perform the HP. In addition to that, Live Ventures is 1.69 times more volatile than HP Inc. It trades about -0.26 of its total potential returns per unit of risk. HP Inc is currently generating about 0.05 per unit of volatility. If you would invest  3,310  in HP Inc on September 12, 2024 and sell it today you would earn a total of  184.00  from holding HP Inc or generate 5.56% return on investment over 90 days.

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

Live Ventures  vs.  HP Inc

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

HP Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Live Ventures and HP

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

The idea behind Live Ventures and HP Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.