Correlation Between Beyond and Liquidity Services

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

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

Diversification Opportunities for Beyond and Liquidity Services

0.3

Correlation Coefficient

Beyond  Liquidity Services

Weak diversification

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

Pair Corralation between Beyond and Liquidity Services

Given the investment horizon of 90 days Beyond Inc is expected to under-perform the Liquidity Services. In addition to that, Beyond is 3.29 times more volatile than Liquidity Services. It trades about -0.31 of its total potential returns per unit of risk. Liquidity Services is currently generating about 0.09 per unit of volatility. If you would invest  1,810  in Liquidity Services on February 10, 2024 and sell it today you would earn a total of  63.00  from holding Liquidity Services or generate 3.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Beyond Inc  vs.  Liquidity Services

Beyond Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Liquidity Services

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liquidity Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Liquidity Services unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beyond and Liquidity Services

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

The idea behind Beyond Inc and Liquidity Services 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.