Correlation Between Verizon Communications and Live Ventures

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

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

Diversification Opportunities for Verizon Communications and Live Ventures

-0.85

Correlation Coefficient

Verizon Communications  Live Ventures

Pay attention - limited upside

The 3 months correlation between Verizon and Live is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and Verizon Communications 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 Verizon Communications 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 Verizon Communications i.e., Verizon Communications and Live Ventures go up and down completely randomly.

Pair Corralation between Verizon Communications and Live Ventures

Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 0.5 times more return on investment than Live Ventures. However, Verizon Communications is 1.99 times less risky than Live Ventures. It trades about 0.13 of its potential returns per unit of risk. Live Ventures is currently generating about -0.22 per unit of risk. If you would invest  3,922  in Verizon Communications on December 21, 2024 and sell it today you would earn a total of  453.00  from holding Verizon Communications or generate 11.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

Verizon Communications  vs.  Live Ventures

Verizon Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verizon Communications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Verizon Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Live Ventures

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Verizon Communications and Live Ventures

The main advantage of trading using opposite Verizon Communications and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications 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 Verizon Communications 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.