Correlation Between Townsquare Media and Live Nation
Can any of the company-specific risk be diversified away by investing in both Townsquare Media 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 Townsquare Media and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Live Nation Entertainment, you can compare the effects of market volatilities on Townsquare Media 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 Townsquare Media with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Live Nation.
Diversification Opportunities for Townsquare Media and Live Nation
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Townsquare and Live is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media 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 Townsquare Media 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 Townsquare Media 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 Townsquare Media i.e., Townsquare Media and Live Nation go up and down completely randomly.
Pair Corralation between Townsquare Media and Live Nation
Assuming the 90 days horizon Townsquare Media is expected to under-perform the Live Nation. In addition to that, Townsquare Media is 1.27 times more volatile than Live Nation Entertainment. It trades about -0.14 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.06 per unit of volatility. If you would invest 10,885 in Live Nation Entertainment on January 18, 2025 and sell it today you would earn a total of 325.00 from holding Live Nation Entertainment or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Townsquare Media vs. Live Nation Entertainment
Performance |
| Timeline |
| Townsquare Media |
| Live Nation Entertainment |
Townsquare Media and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Live Nation
The main advantage of trading using opposite Townsquare Media and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media 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.| Townsquare Media vs. Collins Foods Limited | Townsquare Media vs. Monster Beverage Corp | Townsquare Media vs. TYSON FOODS A | Townsquare Media vs. GAMING FAC SA |
| Live Nation vs. Clearside Biomedical | Live Nation vs. Eurasia Mining Plc | Live Nation vs. GOLDQUEST MINING | Live Nation vs. CVR Medical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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