Correlation Between Dolphin Entertainment and LiveOne

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

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

Diversification Opportunities for Dolphin Entertainment and LiveOne

-0.48

Correlation Coefficient

Dolphin Entertainment  LiveOne

Very good diversification

The 3 months correlation between Dolphin and LiveOne is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment i.e., Dolphin Entertainment and LiveOne go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and LiveOne

Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the LiveOne. In addition to that, Dolphin Entertainment is 1.05 times more volatile than LiveOne. It trades about -0.03 of its total potential returns per unit of risk. LiveOne is currently generating about 0.24 per unit of volatility. If you would invest  91.00  in LiveOne on September 25, 2024 and sell it today you would earn a total of  24.00  from holding LiveOne or generate 26.37% return on investment over 90 days.

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

Dolphin Entertainment  vs.  LiveOne

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

LiveOne

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 2 (%) 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.

Pair Trading with Dolphin Entertainment and LiveOne

The main advantage of trading using opposite Dolphin Entertainment and LiveOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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 Dolphin Entertainment 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.