Correlation Between LiveOne and Gaia

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

By analyzing existing cross correlation between LiveOne and Gaia Inc, you can compare the effects of market volatilities on LiveOne and Gaia 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 Gaia. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiveOne and Gaia.

Diversification Opportunities for LiveOne and Gaia

-0.43

Correlation Coefficient

LiveOne  Gaia

Very good diversification

The 3 months correlation between LiveOne and Gaia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Gaia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaia Inc 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 Gaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaia Inc has no effect on the direction of LiveOne i.e., LiveOne and Gaia go up and down completely randomly.

Pair Corralation between LiveOne and Gaia

Considering the 90-day investment horizon LiveOne is expected to under-perform the Gaia. In addition to that, LiveOne is 2.74 times more volatile than Gaia Inc. It trades about -0.06 of its total potential returns per unit of risk. Gaia Inc is currently generating about 0.17 per unit of volatility. If you would invest  468.00  in Gaia Inc on September 3, 2024 and sell it today you would earn a total of  145.00  from holding Gaia Inc or generate 30.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

LiveOne  vs.  Gaia Inc

LiveOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LiveOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Gaia Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gaia Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Gaia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LiveOne and Gaia

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

The idea behind LiveOne and Gaia Inc 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.