Correlation Between Chicken Soup and LiveOne

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

Diversification Opportunities for Chicken Soup and LiveOne

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Chicken and LiveOne is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chicken Soup For and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Chicken Soup 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 Chicken Soup For 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 Chicken Soup i.e., Chicken Soup and LiveOne go up and down completely randomly.

Pair Corralation between Chicken Soup and LiveOne

If you would invest  83.00  in LiveOne on September 22, 2024 and sell it today you would earn a total of  26.00  from holding LiveOne or generate 31.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Chicken Soup For  vs.  LiveOne

 Performance 
       Timeline  
Chicken Soup For 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
LiveOne 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 3 (%) 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.

Chicken Soup and LiveOne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chicken Soup and LiveOne

The main advantage of trading using opposite Chicken Soup and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicken Soup 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 Chicken Soup For 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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