Correlation Between Live Nation and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Live Nation and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Live Nation and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Advanced Medical.
Diversification Opportunities for Live Nation and Advanced Medical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Advanced is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Live Nation i.e., Live Nation and Advanced Medical go up and down completely randomly.
Pair Corralation between Live Nation and Advanced Medical
Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 0.78 times more return on investment than Advanced Medical. However, Live Nation Entertainment is 1.29 times less risky than Advanced Medical. It trades about 0.07 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.01 per unit of risk. If you would invest 7,960 in Live Nation Entertainment on October 26, 2024 and sell it today you would earn a total of 6,013 from holding Live Nation Entertainment or generate 75.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Live Nation Entertainment vs. Advanced Medical Solutions
Performance |
| Timeline |
| Live Nation Entertainment |
| Advanced Medical Sol |
Live Nation and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Advanced Medical
The main advantage of trading using opposite Live Nation and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Live Nation vs. Xeros Technology Group | Live Nation vs. Ashtead Technology Holdings | Live Nation vs. Ecclesiastical Insurance Office | Live Nation vs. Allianz Technology Trust |
| Advanced Medical vs. Bisichi Mining PLC | Advanced Medical vs. bet at home AG | Advanced Medical vs. Beowulf Mining | Advanced Medical vs. Synthomer plc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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