Correlation Between Live Nation and Revolution Beauty
Can any of the company-specific risk be diversified away by investing in both Live Nation and Revolution Beauty 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 Revolution Beauty 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 Revolution Beauty Group, you can compare the effects of market volatilities on Live Nation and Revolution Beauty 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 Revolution Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Revolution Beauty.
Diversification Opportunities for Live Nation and Revolution Beauty
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Revolution is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Revolution Beauty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Beauty 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 Revolution Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Beauty has no effect on the direction of Live Nation i.e., Live Nation and Revolution Beauty go up and down completely randomly.
Pair Corralation between Live Nation and Revolution Beauty
Assuming the 90 days trading horizon Live Nation Entertainment is expected to under-perform the Revolution Beauty. But the stock apears to be less risky and, when comparing its historical volatility, Live Nation Entertainment is 7.65 times less risky than Revolution Beauty. The stock trades about -0.16 of its potential returns per unit of risk. The Revolution Beauty Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Revolution Beauty Group on October 12, 2024 and sell it today you would earn a total of 530.00 from holding Revolution Beauty Group or generate 36.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Live Nation Entertainment vs. Revolution Beauty Group
Performance |
| Timeline |
| Live Nation Entertainment |
| Revolution Beauty |
Live Nation and Revolution Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Revolution Beauty
The main advantage of trading using opposite Live Nation and Revolution Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Revolution Beauty 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 Revolution Beauty will offset losses from the drop in Revolution Beauty's long position.| Live Nation vs. Software Circle plc | Live Nation vs. Scandic Hotels Group | Live Nation vs. Sabien Technology Group | Live Nation vs. Melia Hotels |
| Revolution Beauty vs. XLMedia PLC | Revolution Beauty vs. Blackrock World Mining | Revolution Beauty vs. Live Nation Entertainment | Revolution Beauty vs. Beowulf Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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