Correlation Between Live Ventures and NextNav Warrant

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

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

Diversification Opportunities for Live Ventures and NextNav Warrant

-0.79

Correlation Coefficient

Live Ventures  NextNav Warrant

Pay attention - limited upside

The 3 months correlation between Live and NextNav is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant 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 NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of Live Ventures i.e., Live Ventures and NextNav Warrant go up and down completely randomly.

Pair Corralation between Live Ventures and NextNav Warrant

Given the investment horizon of 90 days Live Ventures is expected to under-perform the NextNav Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Live Ventures is 1.39 times less risky than NextNav Warrant. The stock trades about -0.12 of its potential returns per unit of risk. The NextNav Warrant is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  314.00  in NextNav Warrant on September 21, 2024 and sell it today you would earn a total of  297.00  from holding NextNav Warrant or generate 94.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.07%
Values	Daily Returns

Live Ventures  vs.  NextNav Warrant

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.

NextNav Warrant

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NextNav Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Live Ventures and NextNav Warrant

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

The idea behind Live Ventures and NextNav Warrant 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.