Correlation Between Livetech and Taurus Armas

Can any of the company-specific risk be diversified away by investing in both Livetech and Taurus Armas 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 Taurus Armas 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 Taurus Armas SA, you can compare the effects of market volatilities on Livetech and Taurus Armas 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 Taurus Armas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livetech and Taurus Armas.

Diversification Opportunities for Livetech and Taurus Armas

-0.3

Correlation Coefficient

Livetech  Taurus Armas

Very good diversification

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

Pair Corralation between Livetech and Taurus Armas

Assuming the 90 days trading horizon Livetech da Bahia is expected to generate 1.74 times more return on investment than Taurus Armas. However, Livetech is 1.74 times more volatile than Taurus Armas SA. It trades about 0.13 of its potential returns per unit of risk. Taurus Armas SA is currently generating about -0.14 per unit of risk. If you would invest  277.00  in Livetech da Bahia on April 24, 2025 and sell it today you would earn a total of  74.00  from holding Livetech da Bahia or generate 26.71% return on investment over 90 days.

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

Livetech da Bahia  vs.  Taurus Armas SA

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.

Taurus Armas SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taurus Armas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Livetech and Taurus Armas

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

The idea behind Livetech da Bahia and Taurus Armas 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.

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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.