Correlation Between LiveOne and Chicken Soup

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

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

Diversification Opportunities for LiveOne and Chicken Soup

-0.48

Correlation Coefficient

LiveOne  Chicken Soup

Very good diversification

The 3 months correlation between LiveOne and Chicken is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Chicken Soup For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicken Soup For and LiveOne 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 LiveOne are associated (or correlated) with Chicken Soup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicken Soup For has no effect on the direction of LiveOne i.e., LiveOne and Chicken Soup go up and down completely randomly.

Pair Corralation between LiveOne and Chicken Soup

Considering the 90-day investment horizon LiveOne is expected to generate 0.42 times more return on investment than Chicken Soup. However, LiveOne is 2.36 times less risky than Chicken Soup. It trades about 0.05 of its potential returns per unit of risk. Chicken Soup For is currently generating about -0.08 per unit of risk. If you would invest  64.00  in LiveOne on September 22, 2024 and sell it today you would earn a total of  45.00  from holding LiveOne or generate 70.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.41%
Values	Daily Returns

LiveOne  vs.  Chicken Soup For

LiveOne

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LiveOne may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chicken Soup For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LiveOne and Chicken Soup

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

The idea behind LiveOne and Chicken Soup For 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.