Correlation Between Live Ventures and Lotus Technology

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

By analyzing existing cross correlation between Live Ventures and Lotus Technology American, you can compare the effects of market volatilities on Live Ventures and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Lotus Technology.

Diversification Opportunities for Live Ventures and Lotus Technology

0.78

Correlation Coefficient

Live Ventures  Lotus Technology

Poor diversification

The 3 months correlation between Live and Lotus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of Live Ventures i.e., Live Ventures and Lotus Technology go up and down completely randomly.

Pair Corralation between Live Ventures and Lotus Technology

Given the investment horizon of 90 days Live Ventures is expected to under-perform the Lotus Technology. But the stock apears to be less risky and, when comparing its historical volatility, Live Ventures is 1.26 times less risky than Lotus Technology. The stock trades about -0.06 of its potential returns per unit of risk. The Lotus Technology American is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,011  in Lotus Technology American on September 27, 2024 and sell it today you would lose (620.00) from holding Lotus Technology American or give up 61.33% 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.  Lotus Technology American

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.

Lotus Technology American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotus Technology American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Live Ventures and Lotus Technology

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

The idea behind Live Ventures and Lotus Technology American 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.