Correlation Between LiveOne and Mediaco Holding

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

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

Diversification Opportunities for LiveOne and Mediaco Holding

0.79

Correlation Coefficient

LiveOne  Mediaco Holding

Poor diversification

The 3 months correlation between LiveOne and Mediaco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding 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 Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of LiveOne i.e., LiveOne and Mediaco Holding go up and down completely randomly.

Pair Corralation between LiveOne and Mediaco Holding

Considering the 90-day investment horizon LiveOne is expected to generate 0.71 times more return on investment than Mediaco Holding. However, LiveOne is 1.41 times less risky than Mediaco Holding. It trades about -0.07 of its potential returns per unit of risk. Mediaco Holding is currently generating about -0.1 per unit of risk. If you would invest  158.00  in LiveOne on August 31, 2024 and sell it today you would lose (61.00) from holding LiveOne or give up 38.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

LiveOne  vs.  Mediaco Holding

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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mediaco Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediaco Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with LiveOne and Mediaco Holding

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

The idea behind LiveOne and Mediaco Holding 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.