Correlation Between LifeSpeak and OLB

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

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

Diversification Opportunities for LifeSpeak and OLB

0.32

Correlation Coefficient

LifeSpeak  OLB

Weak diversification

The 3 months correlation between LifeSpeak and OLB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LifeSpeak and OLB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLB Group and LifeSpeak 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 LifeSpeak are associated (or correlated) with OLB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLB Group has no effect on the direction of LifeSpeak i.e., LifeSpeak and OLB go up and down completely randomly.

Pair Corralation between LifeSpeak and OLB

Assuming the 90 days horizon LifeSpeak is expected to generate 1.54 times more return on investment than OLB. However, LifeSpeak is 1.54 times more volatile than OLB Group. It trades about 0.09 of its potential returns per unit of risk. OLB Group is currently generating about -0.25 per unit of risk. If you would invest  27.00  in LifeSpeak on September 23, 2024 and sell it today you would earn a total of  2.00  from holding LifeSpeak or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

LifeSpeak  vs.  OLB Group

LifeSpeak

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LifeSpeak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

OLB Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OLB Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with LifeSpeak and OLB

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

The idea behind LifeSpeak and OLB Group 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 Stocks Directory module to find actively traded stocks across global markets.