Correlation Between StoneCoLtd and LivePerson
Can any of the company-specific risk be diversified away by investing in both StoneCoLtd and LivePerson 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 StoneCoLtd and LivePerson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StoneCoLtd and LivePerson, you can compare the effects of market volatilities on StoneCoLtd and LivePerson 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 StoneCoLtd with a short position of LivePerson. Check out your portfolio center. Please also check ongoing floating volatility patterns of StoneCoLtd and LivePerson.
Diversification Opportunities for StoneCoLtd and LivePerson
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between StoneCoLtd and LivePerson is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding StoneCoLtd and LivePerson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivePerson and StoneCoLtd 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 StoneCoLtd are associated (or correlated) with LivePerson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivePerson has no effect on the direction of StoneCoLtd i.e., StoneCoLtd and LivePerson go up and down completely randomly.
Pair Corralation between StoneCoLtd and LivePerson
Given the investment horizon of 90 days StoneCoLtd is expected to generate 0.4 times more return on investment than LivePerson. However, StoneCoLtd is 2.51 times less risky than LivePerson. It trades about 0.14 of its potential returns per unit of risk. LivePerson is currently generating about -0.18 per unit of risk. If you would invest 1,001 in StoneCoLtd on January 20, 2024 and sell it today you would earn a total of 525.00 from holding StoneCoLtd or generate 52.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.06% |
| Values | Daily Returns |
StoneCoLtd vs. LivePerson
Performance |
| Timeline |
| StoneCoLtd |
| LivePerson |
StoneCoLtd and LivePerson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StoneCoLtd and LivePerson
The main advantage of trading using opposite StoneCoLtd and LivePerson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StoneCoLtd position performs unexpectedly, LivePerson 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 LivePerson will offset losses from the drop in LivePerson's long position.| StoneCoLtd vs. Palo Alto Networks | StoneCoLtd vs. Zscaler | StoneCoLtd vs. Cloudflare | StoneCoLtd vs. Okta Inc |
| LivePerson vs. Nova | LivePerson vs. Nice | LivePerson vs. Matrix | LivePerson vs. Magic Software Enterprises |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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