Correlation Between Live Nation and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Live Nation and BANK RAKYAT 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 BANK RAKYAT 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 BANK RAKYAT IND, you can compare the effects of market volatilities on Live Nation and BANK RAKYAT 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 BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and BANK RAKYAT.
Diversification Opportunities for Live Nation and BANK RAKYAT
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and BANK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND 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 BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Live Nation i.e., Live Nation and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Live Nation and BANK RAKYAT
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.3 times more return on investment than BANK RAKYAT. However, Live Nation Entertainment is 3.31 times less risky than BANK RAKYAT. It trades about 0.58 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.07 per unit of risk. If you would invest 12,550 in Live Nation Entertainment on November 6, 2024 and sell it today you would earn a total of 1,270 from holding Live Nation Entertainment or generate 10.12% 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. BANK RAKYAT IND
Performance |
| Timeline |
| Live Nation Entertainment |
| BANK RAKYAT IND |
Live Nation and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and BANK RAKYAT
The main advantage of trading using opposite Live Nation and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Live Nation vs. Apollo Investment Corp | Live Nation vs. Lattice Semiconductor | Live Nation vs. Scottish Mortgage Investment | Live Nation vs. ScanSource |
| BANK RAKYAT vs. Warner Music Group | BANK RAKYAT vs. SEKISUI CHEMICAL | BANK RAKYAT vs. CVW CLEANTECH INC | BANK RAKYAT vs. Mitsui Chemicals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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