Correlation Between Livetech and CCR SA

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

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

Diversification Opportunities for Livetech and CCR SA

0.66

Correlation Coefficient

Livetech  CCR SA

Poor diversification

The 3 months correlation between Livetech and CCR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and CCR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCR SA and Livetech 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 Livetech da Bahia are associated (or correlated) with CCR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCR SA has no effect on the direction of Livetech i.e., Livetech and CCR SA go up and down completely randomly.

Pair Corralation between Livetech and CCR SA

Assuming the 90 days trading horizon Livetech da Bahia is expected to generate 2.29 times more return on investment than CCR SA. However, Livetech is 2.29 times more volatile than CCR SA. It trades about 0.12 of its potential returns per unit of risk. CCR SA is currently generating about 0.06 per unit of risk. If you would invest  279.00  in Livetech da Bahia on April 23, 2025 and sell it today you would earn a total of  64.00  from holding Livetech da Bahia or generate 22.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	80.65%
Values	Daily Returns

Livetech da Bahia  vs.  CCR SA

Livetech da Bahia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Livetech da Bahia are ranked lower than 9 (%) 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.

CCR SA

Risk-Adjusted Performance

Insignificant

Over the last 90 days CCR SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CCR SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Livetech and CCR SA

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

The idea behind Livetech da Bahia and CCR SA 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.