Correlation Between Telus Corp and LiveOne

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

Diversification Opportunities for Telus Corp and LiveOne

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Telus and LiveOne is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Telus Corp 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 Telus Corp are associated (or correlated) with LiveOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveOne has no effect on the direction of Telus Corp i.e., Telus Corp and LiveOne go up and down completely randomly.

Pair Corralation between Telus Corp and LiveOne

Allowing for the 90-day total investment horizon Telus Corp is expected to under-perform the LiveOne. But the stock apears to be less risky and, when comparing its historical volatility, Telus Corp is 7.26 times less risky than LiveOne. The stock trades about -0.47 of its potential returns per unit of risk. The LiveOne is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  104.00  in LiveOne on October 9, 2024 and sell it today you would earn a total of  24.00  from holding LiveOne or generate 23.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Telus Corp  vs.  LiveOne

 Performance 
       Timeline  
Telus Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Telus Corp 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 comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
LiveOne 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LiveOne displayed solid returns over the last few months and may actually be approaching a breakup point.

Telus Corp and LiveOne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telus Corp and LiveOne

The main advantage of trading using opposite Telus Corp and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, LiveOne 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 LiveOne will offset losses from the drop in LiveOne's long position.
The idea behind Telus Corp and LiveOne 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.
Check out your portfolio center.
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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