Correlation Between Live Oak and Appfolio
Can any of the company-specific risk be diversified away by investing in both Live Oak and Appfolio 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 Live Oak and Appfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Bancshares, and Appfolio, you can compare the effects of market volatilities on Live Oak and Appfolio 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 Live Oak with a short position of Appfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Appfolio.
Diversification Opportunities for Live Oak and Appfolio
Poor diversification
The 3 months correlation between Live and Appfolio is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Bancshares, and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and Live Oak 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 Live Oak Bancshares, are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of Live Oak i.e., Live Oak and Appfolio go up and down completely randomly.
Pair Corralation between Live Oak and Appfolio
Considering the 90-day investment horizon Live Oak Bancshares, is expected to generate 1.3 times more return on investment than Appfolio. However, Live Oak is 1.3 times more volatile than Appfolio. It trades about 0.49 of its potential returns per unit of risk. Appfolio is currently generating about -0.14 per unit of risk. If you would invest 3,052 in Live Oak Bancshares, on June 8, 2025 and sell it today you would earn a total of 784.00 from holding Live Oak Bancshares, or generate 25.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Bancshares, vs. Appfolio
Performance |
| Timeline |
| Live Oak Bancshares, |
| Appfolio |
Live Oak and Appfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Appfolio
The main advantage of trading using opposite Live Oak and Appfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Appfolio 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 Appfolio will offset losses from the drop in Appfolio's long position.| Live Oak vs. Axos Financial | Live Oak vs. Community West Bancshares | Live Oak vs. First Capital | Live Oak vs. Goosehead Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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