Correlation Between LiveOne and Baosheng Media

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

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

Diversification Opportunities for LiveOne and Baosheng Media

-0.3

Correlation Coefficient

LiveOne  Baosheng Media

Very good diversification

The 3 months correlation between LiveOne and Baosheng is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group and LiveOne 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 LiveOne are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of LiveOne i.e., LiveOne and Baosheng Media go up and down completely randomly.

Pair Corralation between LiveOne and Baosheng Media

Considering the 90-day investment horizon LiveOne is expected to under-perform the Baosheng Media. But the stock apears to be less risky and, when comparing its historical volatility, LiveOne is 1.11 times less risky than Baosheng Media. The stock trades about -0.07 of its potential returns per unit of risk. The Baosheng Media Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  357.00  in Baosheng Media Group on February 27, 2024 and sell it today you would lose (11.00) from holding Baosheng Media Group or give up 3.08% of portfolio value over 90 days.

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

LiveOne  vs.  Baosheng Media Group

LiveOne

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LiveOne are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LiveOne may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Baosheng Media Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Baosheng Media Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Baosheng Media may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with LiveOne and Baosheng Media

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

The idea behind LiveOne and Baosheng Media Group 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.