Correlation Between BCB Bancorp and Live Ventures

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

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

Diversification Opportunities for BCB Bancorp and Live Ventures

-0.49

Correlation Coefficient

BCB Bancorp  Live Ventures

Very good diversification

The 3 months correlation between BCB and Live is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp i.e., BCB Bancorp and Live Ventures go up and down completely randomly.

Pair Corralation between BCB Bancorp and Live Ventures

Given the investment horizon of 90 days BCB Bancorp is expected to under-perform the Live Ventures. But the stock apears to be less risky and, when comparing its historical volatility, BCB Bancorp is 2.26 times less risky than Live Ventures. The stock trades about -0.25 of its potential returns per unit of risk. The Live Ventures is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  990.00  in Live Ventures on September 24, 2024 and sell it today you would earn a total of  40.00  from holding Live Ventures or generate 4.04% return on investment over 90 days.

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

BCB Bancorp  vs.  Live Ventures

BCB Bancorp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCB Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, BCB Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

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 BCB Bancorp and Live Ventures

The main advantage of trading using opposite BCB Bancorp and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp 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 BCB Bancorp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.