Correlation Between Live Nation and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both Live Nation and MOVIE GAMES 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 MOVIE GAMES 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 MOVIE GAMES SA, you can compare the effects of market volatilities on Live Nation and MOVIE GAMES 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 MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and MOVIE GAMES.
Diversification Opportunities for Live Nation and MOVIE GAMES
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and MOVIE is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA 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 MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Live Nation i.e., Live Nation and MOVIE GAMES go up and down completely randomly.
Pair Corralation between Live Nation and MOVIE GAMES
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.51 times more return on investment than MOVIE GAMES. However, Live Nation Entertainment is 1.97 times less risky than MOVIE GAMES. It trades about 0.08 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.01 per unit of risk. If you would invest 6,615 in Live Nation Entertainment on September 14, 2024 and sell it today you would earn a total of 6,055 from holding Live Nation Entertainment or generate 91.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. MOVIE GAMES SA
Performance |
| Timeline |
| Live Nation Entertainment |
| MOVIE GAMES SA |
Live Nation and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and MOVIE GAMES
The main advantage of trading using opposite Live Nation and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| Live Nation vs. National Retail Properties | Live Nation vs. Retail Estates NV | Live Nation vs. Evolution Mining Limited | Live Nation vs. SERI INDUSTRIAL EO |
| MOVIE GAMES vs. National Storage Affiliates | MOVIE GAMES vs. Datang International Power | MOVIE GAMES vs. Verizon Communications | MOVIE GAMES vs. Charter Communications |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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