Correlation Between LivePerson and Nova

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

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

Diversification Opportunities for LivePerson and Nova

0.0

Correlation Coefficient

LivePerson  Nova

Pay attention - limited upside

The 3 months correlation between LivePerson and Nova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LivePerson and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova and LivePerson 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 LivePerson are associated (or correlated) with Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of LivePerson i.e., LivePerson and Nova go up and down completely randomly.

Pair Corralation between LivePerson and Nova

If you would invest (100.00) in Nova on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Nova or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

LivePerson  vs.  Nova

LivePerson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LivePerson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LivePerson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nova

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nova has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LivePerson and Nova

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

The idea behind LivePerson and Nova 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.