Correlation Between Live Oak and Dfa Two-year

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

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

Diversification Opportunities for Live Oak and Dfa Two-year

-0.76

Correlation Coefficient

Live Oak  Dfa Two-year

Pay attention - limited upside

The 3 months correlation between Live and Dfa is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Dfa Two Year Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Two Year and Live Oak 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 Oak Health are associated (or correlated) with Dfa Two-year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Two Year has no effect on the direction of Live Oak i.e., Live Oak and Dfa Two-year go up and down completely randomly.

Pair Corralation between Live Oak and Dfa Two-year

Assuming the 90 days horizon Live Oak Health is expected to generate 26.41 times more return on investment than Dfa Two-year. However, Live Oak is 26.41 times more volatile than Dfa Two Year Global. It trades about 0.06 of its potential returns per unit of risk. Dfa Two Year Global is currently generating about 0.43 per unit of risk. If you would invest  2,091  in Live Oak Health on October 26, 2024 and sell it today you would earn a total of  24.00  from holding Live Oak Health or generate 1.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Live Oak Health  vs.  Dfa Two Year Global

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 fairly strong basic indicators, Live Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dfa Two Year

Risk-Adjusted Performance

37 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Two Year Global are ranked lower than 37 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dfa Two-year is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Live Oak and Dfa Two-year

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

The idea behind Live Oak Health and Dfa Two Year Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.