Correlation Between Live Nation and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Live Nation and BORR DRILLING 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 BORR DRILLING 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 BORR DRILLING NEW, you can compare the effects of market volatilities on Live Nation and BORR DRILLING 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 BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and BORR DRILLING.
Diversification Opportunities for Live Nation and BORR DRILLING
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and BORR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW 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 BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Live Nation i.e., Live Nation and BORR DRILLING go up and down completely randomly.
Pair Corralation between Live Nation and BORR DRILLING
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.18 times more return on investment than BORR DRILLING. However, Live Nation Entertainment is 5.57 times less risky than BORR DRILLING. It trades about 0.45 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.03 per unit of risk. If you would invest 12,530 in Live Nation Entertainment on November 4, 2024 and sell it today you would earn a total of 1,105 from holding Live Nation Entertainment or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. BORR DRILLING NEW
Performance |
| Timeline |
| Live Nation Entertainment |
| BORR DRILLING NEW |
Live Nation and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and BORR DRILLING
The main advantage of trading using opposite Live Nation and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, BORR DRILLING 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.| Live Nation vs. China BlueChemical | Live Nation vs. Coffee Holding Co | Live Nation vs. Quaker Chemical | Live Nation vs. Siamgas And Petrochemicals |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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