Correlation Between Live Ventures and DermTech
Can any of the company-specific risk be diversified away by investing in both Live Ventures and DermTech 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 Live Ventures and DermTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and DermTech, you can compare the effects of market volatilities on Live Ventures and DermTech 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 Live Ventures with a short position of DermTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and DermTech.
Diversification Opportunities for Live Ventures and DermTech
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and DermTech is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and DermTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DermTech and Live Ventures 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 Live Ventures are associated (or correlated) with DermTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DermTech has no effect on the direction of Live Ventures i.e., Live Ventures and DermTech go up and down completely randomly.
Pair Corralation between Live Ventures and DermTech
Given the investment horizon of 90 days Live Ventures is expected to generate 0.52 times more return on investment than DermTech. However, Live Ventures is 1.92 times less risky than DermTech. It trades about 0.01 of its potential returns per unit of risk. DermTech is currently generating about -0.17 per unit of risk. If you would invest 2,605 in Live Ventures on January 25, 2024 and sell it today you would lose (20.00) from holding Live Ventures or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. DermTech
Performance |
| Timeline |
| Live Ventures |
| DermTech |
Live Ventures and DermTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and DermTech
The main advantage of trading using opposite Live Ventures and DermTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures position performs unexpectedly, DermTech 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 DermTech will offset losses from the drop in DermTech's long position.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. LL Flooring Holdings | Live Ventures vs. Kingfisher plc |
| DermTech vs. TransMedics Group | DermTech vs. Curiositystream | DermTech vs. Fulgent Genetics | DermTech vs. Outset MedicalInc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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