Correlation Between Live Nation and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Live Nation and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on Live Nation and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and CCL Industries.
Diversification Opportunities for Live Nation and CCL Industries
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and CCL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Live Nation i.e., Live Nation and CCL Industries go up and down completely randomly.
Pair Corralation between Live Nation and CCL Industries
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 1.83 times more return on investment than CCL Industries. However, Live Nation is 1.83 times more volatile than CCL Industries. It trades about 0.35 of its potential returns per unit of risk. CCL Industries is currently generating about -0.12 per unit of risk. If you would invest 10,710 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 2,485 from holding Live Nation Entertainment or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Live Nation Entertainment vs. CCL Industries
Performance |
| Timeline |
| Live Nation Entertainment |
| CCL Industries |
Live Nation and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and CCL Industries
The main advantage of trading using opposite Live Nation and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Live Nation vs. CAREER EDUCATION | Live Nation vs. ALGOMA STEEL GROUP | Live Nation vs. Xinhua Winshare Publishing | Live Nation vs. CHINA EDUCATION GROUP |
| CCL Industries vs. SEALED AIR | CCL Industries vs. Ryanair Holdings plc | CCL Industries vs. LION ONE METALS | CCL Industries vs. Western Copper and |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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