Correlation Between Live Motion and Betacom SA
Can any of the company-specific risk be diversified away by investing in both Live Motion and Betacom SA 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 Motion and Betacom SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Motion Games and Betacom SA, you can compare the effects of market volatilities on Live Motion and Betacom SA 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 Motion with a short position of Betacom SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Motion and Betacom SA.
Diversification Opportunities for Live Motion and Betacom SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Betacom is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Live Motion Games and Betacom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betacom SA and Live Motion 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 Motion Games are associated (or correlated) with Betacom SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betacom SA has no effect on the direction of Live Motion i.e., Live Motion and Betacom SA go up and down completely randomly.
Pair Corralation between Live Motion and Betacom SA
Assuming the 90 days trading horizon Live Motion Games is expected to under-perform the Betacom SA. In addition to that, Live Motion is 1.6 times more volatile than Betacom SA. It trades about -0.25 of its total potential returns per unit of risk. Betacom SA is currently generating about -0.05 per unit of volatility. If you would invest 454.00 in Betacom SA on September 5, 2024 and sell it today you would lose (40.00) from holding Betacom SA or give up 8.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 90.48% |
Values | Daily Returns |
Live Motion Games vs. Betacom SA
Performance |
Timeline |
Live Motion Games |
Betacom SA |
Live Motion and Betacom SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Live Motion and Betacom SA
The main advantage of trading using opposite Live Motion and Betacom SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Motion position performs unexpectedly, Betacom SA 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 Betacom SA will offset losses from the drop in Betacom SA's long position.Live Motion vs. Asseco Business Solutions | Live Motion vs. Detalion Games SA | Live Motion vs. Kogeneracja SA | Live Motion vs. Asseco South Eastern |
Betacom SA vs. Igoria Trade SA | Betacom SA vs. LSI Software SA | Betacom SA vs. Mlk Foods Public | Betacom SA vs. Live Motion Games |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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