Correlation Between SmartStop Self and Live Ventures

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

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

Diversification Opportunities for SmartStop Self and Live Ventures

-0.26

Correlation Coefficient

SmartStop Self  Live Ventures

Very good diversification

The 3 months correlation between SmartStop and Live is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and SmartStop Self 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 SmartStop Self Storage are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of SmartStop Self i.e., SmartStop Self and Live Ventures go up and down completely randomly.

Pair Corralation between SmartStop Self and Live Ventures

Assuming the 90 days horizon SmartStop Self Storage is expected to generate 0.31 times more return on investment than Live Ventures. However, SmartStop Self Storage is 3.18 times less risky than Live Ventures. It trades about 0.01 of its potential returns per unit of risk. Live Ventures is currently generating about -0.12 per unit of risk. If you would invest  901.00  in SmartStop Self Storage on September 24, 2024 and sell it today you would lose (1.00) from holding SmartStop Self Storage or give up 0.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

SmartStop Self Storage  vs.  Live Ventures

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Live Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SmartStop Self and Live Ventures

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

The idea behind SmartStop Self Storage and Live Ventures 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.