Correlation Between VeriSign and Liveramp Holdings

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

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

Diversification Opportunities for VeriSign and Liveramp Holdings

0.09

Correlation Coefficient

VeriSign  Liveramp Holdings

Significant diversification

The 3 months correlation between VeriSign and Liveramp is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding VeriSign and Liveramp Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liveramp Holdings and VeriSign 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 VeriSign are associated (or correlated) with Liveramp Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liveramp Holdings has no effect on the direction of VeriSign i.e., VeriSign and Liveramp Holdings go up and down completely randomly.

Pair Corralation between VeriSign and Liveramp Holdings

Given the investment horizon of 90 days VeriSign is expected to under-perform the Liveramp Holdings. But the stock apears to be less risky and, when comparing its historical volatility, VeriSign is 1.7 times less risky than Liveramp Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Liveramp Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,671  in Liveramp Holdings on May 6, 2025 and sell it today you would earn a total of  529.00  from holding Liveramp Holdings or generate 19.81% return on investment over 90 days.

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

VeriSign  vs.  Liveramp Holdings

VeriSign

Risk-Adjusted Performance

Very Weak

Over the last 90 days VeriSign has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, VeriSign is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Liveramp Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Liveramp Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Liveramp Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VeriSign and Liveramp Holdings

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

The idea behind VeriSign and Liveramp Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.