Correlation Between Live Nation and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Live Nation and Amkor Technology 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 Amkor Technology 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 Amkor Technology, you can compare the effects of market volatilities on Live Nation and Amkor Technology 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 Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Amkor Technology.
Diversification Opportunities for Live Nation and Amkor Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Live and Amkor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology 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 Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Live Nation i.e., Live Nation and Amkor Technology go up and down completely randomly.
Pair Corralation between Live Nation and Amkor Technology
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.6 times more return on investment than Amkor Technology. However, Live Nation Entertainment is 1.65 times less risky than Amkor Technology. It trades about 0.07 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.01 per unit of risk. If you would invest 7,409 in Live Nation Entertainment on October 27, 2024 and sell it today you would earn a total of 5,831 from holding Live Nation Entertainment or generate 78.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Amkor Technology
Performance |
| Timeline |
| Live Nation Entertainment |
| Amkor Technology |
Live Nation and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Amkor Technology
The main advantage of trading using opposite Live Nation and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| Live Nation vs. Vienna Insurance Group | Live Nation vs. REMEDY ENTERTAINMENT OYJ | Live Nation vs. ATRESMEDIA | Live Nation vs. GigaMedia |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. QUALCOMM Incorporated |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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