Correlation Between Road Studio and Live Motion

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Can any of the company-specific risk be diversified away by investing in both Road Studio and Live Motion 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 Road Studio and Live Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Road Studio SA and Live Motion Games, you can compare the effects of market volatilities on Road Studio and Live Motion 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 Road Studio with a short position of Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Studio and Live Motion.

Diversification Opportunities for Road Studio and Live Motion

RoadLiveDiversified AwayRoadLiveDiversified Away100%
0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Road and Live is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Road Studio SA and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games and Road Studio 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 Road Studio SA are associated (or correlated) with Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of Road Studio i.e., Road Studio and Live Motion go up and down completely randomly.

Pair Corralation between Road Studio and Live Motion

Assuming the 90 days trading horizon Road Studio SA is expected to generate 0.87 times more return on investment than Live Motion. However, Road Studio SA is 1.15 times less risky than Live Motion. It trades about 0.0 of its potential returns per unit of risk. Live Motion Games is currently generating about -0.05 per unit of risk. If you would invest  1,280  in Road Studio SA on November 21, 2024 and sell it today you would lose (602.00) from holding Road Studio SA or give up 47.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

Road Studio SA  vs.  Live Motion Games

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-10010
JavaScript chart by amCharts 3.21.15RST LMG
       Timeline  
Road Studio SA 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Road Studio SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Road Studio reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.555.566.57
Live Motion Games 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Live Motion Games has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.80.911.11.21.31.41.5

Road Studio and Live Motion Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.62-10.95-7.28-3.61-0.06123.667.4511.2415.0318.82 0.0100.0120.0140.0160.018
JavaScript chart by amCharts 3.21.15RST LMG
       Returns  

Pair Trading with Road Studio and Live Motion

The main advantage of trading using opposite Road Studio and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Studio position performs unexpectedly, Live Motion 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 Live Motion will offset losses from the drop in Live Motion's long position.
The idea behind Road Studio SA and Live Motion Games 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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