Correlation Between Livetech and Apartment Investment

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

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

Diversification Opportunities for Livetech and Apartment Investment

-0.14

Correlation Coefficient

Livetech  Apartment Investment

Good diversification

The 3 months correlation between Livetech and Apartment is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and and Livetech 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 Livetech da Bahia are associated (or correlated) with Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Livetech i.e., Livetech and Apartment Investment go up and down completely randomly.

Pair Corralation between Livetech and Apartment Investment

Assuming the 90 days trading horizon Livetech da Bahia is expected to under-perform the Apartment Investment. In addition to that, Livetech is 1.61 times more volatile than Apartment Investment and. It trades about -0.11 of its total potential returns per unit of risk. Apartment Investment and is currently generating about 0.01 per unit of volatility. If you would invest  5,281  in Apartment Investment and on August 31, 2024 and sell it today you would lose (8.00) from holding Apartment Investment and or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Livetech da Bahia  vs.  Apartment Investment and

Livetech da Bahia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Livetech da Bahia 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 comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Apartment Investment and

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Livetech and Apartment Investment

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

The idea behind Livetech da Bahia and Apartment Investment and 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.