Correlation Between Live Nation and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Live Nation and Spirent Communications 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 Spirent Communications 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 Spirent Communications plc, you can compare the effects of market volatilities on Live Nation and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Spirent Communications.
Diversification Opportunities for Live Nation and Spirent Communications
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Spirent is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Live Nation i.e., Live Nation and Spirent Communications go up and down completely randomly.
Pair Corralation between Live Nation and Spirent Communications
Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 2.62 times more return on investment than Spirent Communications. However, Live Nation is 2.62 times more volatile than Spirent Communications plc. It trades about 0.36 of its potential returns per unit of risk. Spirent Communications plc is currently generating about 0.11 per unit of risk. If you would invest 11,701 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 2,151 from holding Live Nation Entertainment or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Spirent Communications plc
Performance |
| Timeline |
| Live Nation Entertainment |
| Spirent Communications |
Live Nation and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Spirent Communications
The main advantage of trading using opposite Live Nation and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Live Nation vs. Uniper SE | Live Nation vs. Mulberry Group PLC | Live Nation vs. London Security Plc | Live Nation vs. Triad Group PLC |
| Spirent Communications vs. Gaztransport et Technigaz | Spirent Communications vs. United Airlines Holdings | Spirent Communications vs. Federal Realty Investment | Spirent Communications vs. Kaufman Et Broad |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Transaction History View history of all your transactions and understand their impact on performance |