Correlation Between Sinclair Broadcast and LiveOne

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

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

Diversification Opportunities for Sinclair Broadcast and LiveOne

-0.27

Correlation Coefficient

Sinclair Broadcast  LiveOne

Very good diversification

The 3 months correlation between Sinclair and LiveOne is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with LiveOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveOne has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and LiveOne go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and LiveOne

Given the investment horizon of 90 days Sinclair Broadcast Group is expected to under-perform the LiveOne. But the stock apears to be less risky and, when comparing its historical volatility, Sinclair Broadcast Group is 2.08 times less risky than LiveOne. The stock trades about -0.1 of its potential returns per unit of risk. The LiveOne is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  83.00  in LiveOne on September 22, 2024 and sell it today you would earn a total of  26.00  from holding LiveOne or generate 31.33% return on investment over 90 days.

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

Sinclair Broadcast Group  vs.  LiveOne

Sinclair Broadcast

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Sinclair Broadcast demonstrated solid returns over the last few months and may actually be approaching a breakup point.

LiveOne

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LiveOne displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sinclair Broadcast and LiveOne

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

The idea behind Sinclair Broadcast Group and LiveOne 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.