Correlation Between Analog Devices, and Livetech

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

By analyzing existing cross correlation between Analog Devices, and Livetech da Bahia, you can compare the effects of market volatilities on Analog Devices, and Livetech 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 Analog Devices, with a short position of Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices, and Livetech.

Diversification Opportunities for Analog Devices, and Livetech

0.79

Correlation Coefficient

Analog Devices,  Livetech

Poor diversification

The 3 months correlation between Analog and Livetech is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices, and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia and Analog Devices, 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 Analog Devices, are associated (or correlated) with Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of Analog Devices, i.e., Analog Devices, and Livetech go up and down completely randomly.

Pair Corralation between Analog Devices, and Livetech

Assuming the 90 days trading horizon Analog Devices, is expected to generate 0.55 times more return on investment than Livetech. However, Analog Devices, is 1.81 times less risky than Livetech. It trades about 0.24 of its potential returns per unit of risk. Livetech da Bahia is currently generating about 0.13 per unit of risk. If you would invest  50,969  in Analog Devices, on April 24, 2025 and sell it today you would earn a total of  15,628  from holding Analog Devices, or generate 30.66% return on investment over 90 days.

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

Analog Devices,  vs.  Livetech da Bahia

Analog Devices,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices, are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Analog Devices, sustained solid returns over the last few months and may actually be approaching a breakup point.

Livetech da Bahia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Livetech da Bahia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Livetech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices, and Livetech

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

The idea behind Analog Devices, and Livetech da Bahia 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .