Correlation Between Live Nation and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Live Nation and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Live Nation and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Litigation Capital.
Diversification Opportunities for Live Nation and Litigation Capital
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Litigation is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Live Nation i.e., Live Nation and Litigation Capital go up and down completely randomly.
Pair Corralation between Live Nation and Litigation Capital
Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 0.73 times more return on investment than Litigation Capital. However, Live Nation Entertainment is 1.37 times less risky than Litigation Capital. It trades about 0.2 of its potential returns per unit of risk. Litigation Capital Management is currently generating about -0.1 per unit of risk. If you would invest 13,276 in Live Nation Entertainment on October 24, 2024 and sell it today you would earn a total of 595.00 from holding Live Nation Entertainment or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Litigation Capital Management
Performance |
| Timeline |
| Live Nation Entertainment |
| Litigation Capital |
Live Nation and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Litigation Capital
The main advantage of trading using opposite Live Nation and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Live Nation vs. Norwegian Air Shuttle | Live Nation vs. Sligro Food Group | Live Nation vs. Dairy Farm International | Live Nation vs. Axfood AB |
| Litigation Capital vs. Ubisoft Entertainment | Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. Liberty Media Corp | Litigation Capital vs. Live Nation Entertainment |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |