Correlation Between Sphere 3D and LivePerson

Can any of the company-specific risk be diversified away by investing in both Sphere 3D and LivePerson 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 Sphere 3D and LivePerson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sphere 3D Corp and LivePerson, you can compare the effects of market volatilities on Sphere 3D and LivePerson 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 Sphere 3D with a short position of LivePerson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere 3D and LivePerson.

Diversification Opportunities for Sphere 3D and LivePerson

-0.51

Correlation Coefficient

Sphere 3D  LivePerson

Excellent diversification

The 3 months correlation between Sphere and LivePerson is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sphere 3D Corp and LivePerson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivePerson and Sphere 3D 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 Sphere 3D Corp are associated (or correlated) with LivePerson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivePerson has no effect on the direction of Sphere 3D i.e., Sphere 3D and LivePerson go up and down completely randomly.

Pair Corralation between Sphere 3D and LivePerson

Considering the 90-day investment horizon Sphere 3D Corp is expected to under-perform the LivePerson. In addition to that, Sphere 3D is 1.11 times more volatile than LivePerson. It trades about -0.02 of its total potential returns per unit of risk. LivePerson is currently generating about 0.02 per unit of volatility. If you would invest  86.00  in LivePerson on May 6, 2025 and sell it today you would lose (2.00) from holding LivePerson or give up 2.33% of portfolio value over 90 days.

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

Sphere 3D Corp  vs.  LivePerson

Sphere 3D Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sphere 3D Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

LivePerson

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LivePerson are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, LivePerson is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sphere 3D and LivePerson

The main advantage of trading using opposite Sphere 3D and LivePerson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere 3D position performs unexpectedly, LivePerson 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 LivePerson will offset losses from the drop in LivePerson's long position.

The idea behind Sphere 3D Corp and LivePerson 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.