Correlation Between VOXX International and Live Ventures

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

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

Diversification Opportunities for VOXX International and Live Ventures

-0.19

Correlation Coefficient

VOXX International  Live Ventures

Good diversification

The 3 months correlation between VOXX and Live is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and VOXX International 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 VOXX International are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of VOXX International i.e., VOXX International and Live Ventures go up and down completely randomly.

Pair Corralation between VOXX International and Live Ventures

Given the investment horizon of 90 days VOXX International is expected to under-perform the Live Ventures. In addition to that, VOXX International is 1.04 times more volatile than Live Ventures. It trades about -0.21 of its total potential returns per unit of risk. Live Ventures is currently generating about -0.04 per unit of volatility. If you would invest  2,796  in Live Ventures on February 2, 2024 and sell it today you would lose (207.00) from holding Live Ventures or give up 7.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

VOXX International  vs.  Live Ventures

VOXX International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOXX International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Live Ventures

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Live Ventures are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Live Ventures may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with VOXX International and Live Ventures

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

The idea behind VOXX International and Live Ventures 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.