Correlation Between Live Nation and Walmart
Can any of the company-specific risk be diversified away by investing in both Live Nation and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Live Nation and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Walmart.
Diversification Opportunities for Live Nation and Walmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Live Nation i.e., Live Nation and Walmart go up and down completely randomly.
Pair Corralation between Live Nation and Walmart
Assuming the 90 days trading horizon Live Nation is expected to generate 3.62 times less return on investment than Walmart. But when comparing it to its historical volatility, Live Nation Entertainment is 7.64 times less risky than Walmart. It trades about 0.09 of its potential returns per unit of risk. Walmart is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,418 in Walmart on September 12, 2024 and sell it today you would earn a total of 1,542 from holding Walmart or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Live Nation Entertainment vs. Walmart
Performance |
| Timeline |
| Live Nation Entertainment |
| Walmart |
Live Nation and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Walmart
The main advantage of trading using opposite Live Nation and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Live Nation vs. Hong Kong Land | Live Nation vs. Neometals | Live Nation vs. Coor Service Management | Live Nation vs. Fidelity Sustainable USD |
| Walmart vs. Westlake Chemical Corp | Walmart vs. Prosiebensat 1 Media | Walmart vs. Live Nation Entertainment | Walmart vs. One Media iP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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