Correlation Between Live Nation and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Live Nation and Prosiebensat 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 Nation and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment and Prosiebensat 1 Media, you can compare the effects of market volatilities on Live Nation and Prosiebensat 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 Nation with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Prosiebensat.
Diversification Opportunities for Live Nation and Prosiebensat
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Live and Prosiebensat is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and Live Nation 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 Nation Entertainment are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Live Nation i.e., Live Nation and Prosiebensat go up and down completely randomly.
Pair Corralation between Live Nation and Prosiebensat
Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 0.73 times more return on investment than Prosiebensat. However, Live Nation Entertainment is 1.37 times less risky than Prosiebensat. It trades about 0.07 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.03 per unit of risk. If you would invest 7,710 in Live Nation Entertainment on November 6, 2024 and sell it today you would earn a total of 6,766 from holding Live Nation Entertainment or generate 87.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Live Nation Entertainment vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Live Nation Entertainment |
| Prosiebensat 1 Media |
Live Nation and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Prosiebensat
The main advantage of trading using opposite Live Nation and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Live Nation vs. Spotify Technology SA | Live Nation vs. Bytes Technology | Live Nation vs. Raymond James Financial | Live Nation vs. Take Two Interactive Software |
| Prosiebensat vs. Zinc Media Group | Prosiebensat vs. XLMedia PLC | Prosiebensat vs. Hollywood Bowl Group | Prosiebensat vs. Universal Display Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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