Correlation Between Live Oak and Victory Rs

Can any of the company-specific risk be diversified away by investing in both Live Oak and Victory Rs 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 Victory Rs 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 Victory Rs Large, you can compare the effects of market volatilities on Live Oak and Victory Rs 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 Victory Rs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Victory Rs.

Diversification Opportunities for Live Oak and Victory Rs

0.75

Correlation Coefficient

Live Oak  Victory Rs

Poor diversification

The 3 months correlation between Live and Victory is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Victory Rs Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Large 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Large has no effect on the direction of Live Oak i.e., Live Oak and Victory Rs go up and down completely randomly.

Pair Corralation between Live Oak and Victory Rs

Assuming the 90 days horizon Live Oak Health is expected to generate 1.15 times more return on investment than Victory Rs. However, Live Oak is 1.15 times more volatile than Victory Rs Large. It trades about 0.16 of its potential returns per unit of risk. Victory Rs Large is currently generating about 0.05 per unit of risk. If you would invest  2,045  in Live Oak Health on December 11, 2024 and sell it today you would earn a total of  104.00  from holding Live Oak Health or generate 5.09% return on investment over 90 days.

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

Live Oak Health  vs.  Victory Rs Large

Live Oak Health

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Live Oak Health are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Victory Rs Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Rs Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Live Oak and Victory Rs

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

The idea behind Live Oak Health and Victory Rs Large 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.