Correlation Between Ynvisible Interactive and Liberty Defense

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

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

Diversification Opportunities for Ynvisible Interactive and Liberty Defense

-0.3

Correlation Coefficient

Ynvisible Interactive  Liberty Defense

Very good diversification

The 3 months correlation between Ynvisible and Liberty is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ynvisible Interactive and Liberty Defense Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Defense Holdings and Ynvisible Interactive 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 Ynvisible Interactive are associated (or correlated) with Liberty Defense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Defense Holdings has no effect on the direction of Ynvisible Interactive i.e., Ynvisible Interactive and Liberty Defense go up and down completely randomly.

Pair Corralation between Ynvisible Interactive and Liberty Defense

Assuming the 90 days horizon Ynvisible Interactive is expected to generate 2.2 times more return on investment than Liberty Defense. However, Ynvisible Interactive is 2.2 times more volatile than Liberty Defense Holdings. It trades about 0.08 of its potential returns per unit of risk. Liberty Defense Holdings is currently generating about -0.07 per unit of risk. If you would invest  13.00  in Ynvisible Interactive on October 13, 2024 and sell it today you would earn a total of  1.00  from holding Ynvisible Interactive or generate 7.69% return on investment over 90 days.

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

Ynvisible Interactive  vs.  Liberty Defense Holdings

Ynvisible Interactive

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ynvisible Interactive are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ynvisible Interactive showed solid returns over the last few months and may actually be approaching a breakup point.

Liberty Defense Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Defense Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Liberty Defense reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ynvisible Interactive and Liberty Defense

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

The idea behind Ynvisible Interactive and Liberty Defense Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.