Correlation Between Live Ventures and BAKER

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

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

Diversification Opportunities for Live Ventures and BAKER

0.49

Correlation Coefficient

Live Ventures  BAKER

Very weak diversification

The 3 months correlation between Live and BAKER is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Live Ventures i.e., Live Ventures and BAKER go up and down completely randomly.

Pair Corralation between Live Ventures and BAKER

Given the investment horizon of 90 days Live Ventures is expected to under-perform the BAKER. In addition to that, Live Ventures is 2.96 times more volatile than BAKER HUGHES A. It trades about -0.01 of its total potential returns per unit of risk. BAKER HUGHES A is currently generating about 0.06 per unit of volatility. If you would invest  8,026  in BAKER HUGHES A on October 21, 2024 and sell it today you would earn a total of  195.00  from holding BAKER HUGHES A or generate 2.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	80.0%
Values	Daily Returns

Live Ventures  vs.  BAKER HUGHES A

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 latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

BAKER HUGHES A

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BAKER HUGHES A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BAKER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Live Ventures and BAKER

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

The idea behind Live Ventures and BAKER HUGHES A 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.