Correlation Between LiveOne and Roku

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

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

Diversification Opportunities for LiveOne and Roku

0.07

Correlation Coefficient

LiveOne  Roku

Significant diversification

The 3 months correlation between LiveOne and Roku is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and LiveOne 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 LiveOne are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of LiveOne i.e., LiveOne and Roku go up and down completely randomly.

Pair Corralation between LiveOne and Roku

Considering the 90-day investment horizon LiveOne is expected to under-perform the Roku. In addition to that, LiveOne is 1.67 times more volatile than Roku Inc. It trades about -0.13 of its total potential returns per unit of risk. Roku Inc is currently generating about 0.03 per unit of volatility. If you would invest  7,489  in Roku Inc on December 28, 2024 and sell it today you would earn a total of  116.00  from holding Roku Inc or generate 1.55% return on investment over 90 days.

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

LiveOne  vs.  Roku Inc

LiveOne

Risk-Adjusted Performance

Very Weak

Over the last 90 days LiveOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Roku Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Roku Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Roku may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LiveOne and Roku

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

The idea behind LiveOne and Roku Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.