Correlation Between G5 Entertainment and Live Nation
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Live Nation 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 G5 Entertainment and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and Live Nation Entertainment, you can compare the effects of market volatilities on G5 Entertainment and Live Nation 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 G5 Entertainment with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Live Nation.
Diversification Opportunities for G5 Entertainment and Live Nation
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0QUS and Live is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and G5 Entertainment 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 G5 Entertainment AB are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Live Nation go up and down completely randomly.
Pair Corralation between G5 Entertainment and Live Nation
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 1.5 times less return on investment than Live Nation. In addition to that, G5 Entertainment is 1.34 times more volatile than Live Nation Entertainment. It trades about 0.18 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.36 per unit of volatility. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. Live Nation Entertainment
Performance |
| Timeline |
| G5 Entertainment |
| Live Nation Entertainment |
G5 Entertainment and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Live Nation
The main advantage of trading using opposite G5 Entertainment and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| G5 Entertainment vs. Darden Restaurants | G5 Entertainment vs. Beowulf Mining | G5 Entertainment vs. SBM Offshore NV | G5 Entertainment vs. Finnair Oyj |
| Live Nation vs. Uniper SE | Live Nation vs. Mulberry Group PLC | Live Nation vs. London Security Plc | Live Nation vs. Triad Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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