Correlation Between Livetech and Multilaser Industrial

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

Diversification Opportunities for Livetech and Multilaser Industrial

-0.67

Correlation Coefficient

Livetech  Multilaser Industrial

Excellent diversification

The 3 months correlation between Livetech and Multilaser is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and Multilaser Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multilaser Industrial 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 Multilaser Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multilaser Industrial has no effect on the direction of Livetech i.e., Livetech and Multilaser Industrial go up and down completely randomly.

Pair Corralation between Livetech and Multilaser Industrial

Assuming the 90 days trading horizon Livetech da Bahia is expected to generate 1.14 times more return on investment than Multilaser Industrial. However, Livetech is 1.14 times more volatile than Multilaser Industrial SA. It trades about 0.1 of its potential returns per unit of risk. Multilaser Industrial SA is currently generating about -0.09 per unit of risk. If you would invest  291.00  in Livetech da Bahia on May 2, 2025 and sell it today you would earn a total of  59.00  from holding Livetech da Bahia or generate 20.27% return on investment over 90 days.

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

Livetech da Bahia  vs.  Multilaser Industrial 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 8 (%) 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.

Multilaser Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multilaser Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Multilaser Industrial

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

The idea behind Livetech da Bahia and Multilaser Industrial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.