Correlation Between Live Nation and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both Live Nation and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on Live Nation and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and BRIT AMER.
Diversification Opportunities for Live Nation and BRIT AMER
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Live and BRIT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of Live Nation i.e., Live Nation and BRIT AMER go up and down completely randomly.
Pair Corralation between Live Nation and BRIT AMER
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 1.48 times more return on investment than BRIT AMER. However, Live Nation is 1.48 times more volatile than BRIT AMER TOBACCO. It trades about 0.19 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.17 per unit of risk. If you would invest 8,668 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 4,517 from holding Live Nation Entertainment or generate 52.11% 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. BRIT AMER TOBACCO
Performance |
| Timeline |
| Live Nation Entertainment |
| BRIT AMER TOBACCO |
Live Nation and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and BRIT AMER
The main advantage of trading using opposite Live Nation and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's 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 |
| BRIT AMER vs. Enter Air SA | BRIT AMER vs. International Consolidated Airlines | BRIT AMER vs. FORWARD AIR P | BRIT AMER vs. Norwegian Air Shuttle |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |