Correlation Between LivePerson and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both LivePerson and Bazan Oil 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 LivePerson and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LivePerson and Bazan Oil Refineries, you can compare the effects of market volatilities on LivePerson and Bazan Oil 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 LivePerson with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of LivePerson and Bazan Oil.
Diversification Opportunities for LivePerson and Bazan Oil
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LivePerson and Bazan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LivePerson and Bazan Oil Refineries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bazan Oil Refineries and LivePerson 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 LivePerson are associated (or correlated) with Bazan Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bazan Oil Refineries has no effect on the direction of LivePerson i.e., LivePerson and Bazan Oil go up and down completely randomly.
Pair Corralation between LivePerson and Bazan Oil
Assuming the 90 days trading horizon LivePerson is expected to under-perform the Bazan Oil. In addition to that, LivePerson is 2.42 times more volatile than Bazan Oil Refineries. It trades about -0.22 of its total potential returns per unit of risk. Bazan Oil Refineries is currently generating about -0.03 per unit of volatility. If you would invest 12,296 in Bazan Oil Refineries on January 24, 2024 and sell it today you would lose (1,496) from holding Bazan Oil Refineries or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LivePerson vs. Bazan Oil Refineries
Performance |
| Timeline |
| LivePerson |
| Bazan Oil Refineries |
LivePerson and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LivePerson and Bazan Oil
The main advantage of trading using opposite LivePerson and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LivePerson position performs unexpectedly, Bazan Oil 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 Bazan Oil will offset losses from the drop in Bazan Oil's long position.| LivePerson vs. Nova | LivePerson vs. Nice | LivePerson vs. Matrix | LivePerson vs. Magic Software Enterprises |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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