Correlation Between Weir Group and Live Current

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

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

Diversification Opportunities for Weir Group and Live Current

0.0

Correlation Coefficient

Weir Group  Live Current

Pay attention - limited upside

The 3 months correlation between Weir and Live is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weir Group PLC and Live Current Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Current Media and Weir Group 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 Weir Group PLC are associated (or correlated) with Live Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Current Media has no effect on the direction of Weir Group i.e., Weir Group and Live Current go up and down completely randomly.

Pair Corralation between Weir Group and Live Current

If you would invest  1,147  in Weir Group PLC on February 29, 2024 and sell it today you would earn a total of  253.00  from holding Weir Group PLC or generate 22.06% return on investment over 90 days.

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

Weir Group PLC  vs.  Live Current Media

Weir Group PLC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weir Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Weir Group showed solid returns over the last few months and may actually be approaching a breakup point.

Live Current Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Current Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Live Current is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Weir Group and Live Current

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

The idea behind Weir Group PLC and Live Current Media 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.