Correlation Between National Beverage and Live Nation
Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Live Nation Entertainment, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Live Nation.
Diversification Opportunities for National Beverage and Live Nation
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Live is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp 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 National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and Live Nation go up and down completely randomly.
Pair Corralation between National Beverage and Live Nation
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Live Nation. In addition to that, National Beverage is 1.34 times more volatile than Live Nation Entertainment. It trades about -0.35 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.07 per unit of volatility. If you would invest 12,670 in Live Nation Entertainment on October 12, 2024 and sell it today you would lose (180.00) from holding Live Nation Entertainment or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
National Beverage Corp vs. Live Nation Entertainment
Performance |
| Timeline |
| National Beverage Corp |
| Live Nation Entertainment |
National Beverage and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Live Nation
The main advantage of trading using opposite National Beverage and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.| National Beverage vs. BURLINGTON STORES | National Beverage vs. Calibre Mining Corp | National Beverage vs. GREENX METALS LTD | National Beverage vs. ADRIATIC METALS LS 013355 |
| Live Nation vs. National Beverage Corp | Live Nation vs. CHEMICAL INDUSTRIES | Live Nation vs. Soken Chemical Engineering | Live Nation vs. INDOFOOD AGRI RES |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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