Correlation Between Live Nation and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both Live Nation and Sartorius Stedim 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 Sartorius Stedim 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 Sartorius Stedim Biotech, you can compare the effects of market volatilities on Live Nation and Sartorius Stedim 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 Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Sartorius Stedim.
Diversification Opportunities for Live Nation and Sartorius Stedim
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Sartorius is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Live Nation i.e., Live Nation and Sartorius Stedim go up and down completely randomly.
Pair Corralation between Live Nation and Sartorius Stedim
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.67 times more return on investment than Sartorius Stedim. However, Live Nation Entertainment is 1.5 times less risky than Sartorius Stedim. It trades about 0.07 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about -0.03 per unit of risk. If you would invest 6,953 in Live Nation Entertainment on August 26, 2024 and sell it today you would earn a total of 6,162 from holding Live Nation Entertainment or generate 88.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| Live Nation Entertainment |
| Sartorius Stedim Biotech |
Live Nation and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Sartorius Stedim
The main advantage of trading using opposite Live Nation and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Sartorius Stedim 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 Sartorius Stedim will offset losses from the drop in Sartorius Stedim's long position.| Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. Origin Agritech | Live Nation vs. SIVERS SEMICONDUCTORS AB |
| Sartorius Stedim vs. PT Global Mediacom | Sartorius Stedim vs. Live Nation Entertainment | Sartorius Stedim vs. Aegean Airlines SA | Sartorius Stedim vs. Townsquare Media |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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