Correlation Between Live Nation and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Live Nation and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Live Nation and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and XLMedia PLC.
Diversification Opportunities for Live Nation and XLMedia PLC
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and XLMedia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Live Nation i.e., Live Nation and XLMedia PLC go up and down completely randomly.
Pair Corralation between Live Nation and XLMedia PLC
Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 1.57 times more return on investment than XLMedia PLC. However, Live Nation is 1.57 times more volatile than XLMedia PLC. It trades about 0.36 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.07 per unit of risk. If you would invest 11,882 in Live Nation Entertainment on August 28, 2024 and sell it today you would earn a total of 2,105 from holding Live Nation Entertainment or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. XLMedia PLC
Performance |
| Timeline |
| Live Nation Entertainment |
| XLMedia PLC |
Live Nation and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and XLMedia PLC
The main advantage of trading using opposite Live Nation and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Live Nation vs. Samsung Electronics Co | Live Nation vs. Samsung Electronics Co | Live Nation vs. Hyundai Motor | Live Nation vs. Toyota Motor Corp |
| XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Hyundai Motor | XLMedia PLC vs. Toyota Motor Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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