Correlation Between Live Ventures and Jadeart

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

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

Diversification Opportunities for Live Ventures and Jadeart

0.65

Correlation Coefficient

Live Ventures  Jadeart

Poor diversification

The 3 months correlation between Live and Jadeart is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Jadeart Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadeart Group and Live Ventures 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 Live Ventures are associated (or correlated) with Jadeart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadeart Group has no effect on the direction of Live Ventures i.e., Live Ventures and Jadeart go up and down completely randomly.

Pair Corralation between Live Ventures and Jadeart

Given the investment horizon of 90 days Live Ventures is expected to under-perform the Jadeart. But the stock apears to be less risky and, when comparing its historical volatility, Live Ventures is 4.78 times less risky than Jadeart. The stock trades about -0.12 of its potential returns per unit of risk. The Jadeart Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.42  in Jadeart Group on September 5, 2024 and sell it today you would lose (0.08) from holding Jadeart Group or give up 19.05% of portfolio value over 90 days.

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

Live Ventures  vs.  Jadeart Group

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 uncertain 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.

Jadeart Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jadeart Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Jadeart sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Live Ventures and Jadeart

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

The idea behind Live Ventures and Jadeart Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..