Correlation Between AcadeMedia and Live Nation
Can any of the company-specific risk be diversified away by investing in both AcadeMedia 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 AcadeMedia and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Live Nation Entertainment, you can compare the effects of market volatilities on AcadeMedia 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 AcadeMedia with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Live Nation.
Diversification Opportunities for AcadeMedia and Live Nation
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AcadeMedia and Live is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia 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 AcadeMedia 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 AcadeMedia 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 AcadeMedia i.e., AcadeMedia and Live Nation go up and down completely randomly.
Pair Corralation between AcadeMedia and Live Nation
Assuming the 90 days trading horizon AcadeMedia is expected to generate 4.27 times less return on investment than Live Nation. But when comparing it to its historical volatility, AcadeMedia AB is 1.08 times less risky than Live Nation. It trades about 0.05 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 9,395 in Live Nation Entertainment on September 3, 2024 and sell it today you would earn a total of 4,433 from holding Live Nation Entertainment or generate 47.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
AcadeMedia AB vs. Live Nation Entertainment
Performance |
| Timeline |
| AcadeMedia AB |
| Live Nation Entertainment |
AcadeMedia and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Live Nation
The main advantage of trading using opposite AcadeMedia and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia 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.| AcadeMedia vs. Elmos Semiconductor SE | AcadeMedia vs. Capital Drilling | AcadeMedia vs. Nordic Semiconductor ASA | AcadeMedia vs. Taiwan Semiconductor Manufacturing |
| Live Nation vs. Darden Restaurants | Live Nation vs. Universal Display Corp | Live Nation vs. Spirent Communications plc | Live Nation vs. Various Eateries 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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