Correlation Between Live Nation and Macys
Can any of the company-specific risk be diversified away by investing in both Live Nation and Macys 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 Macys 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 Macys Inc, you can compare the effects of market volatilities on Live Nation and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Macys.
Diversification Opportunities for Live Nation and Macys
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Macys is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of Live Nation i.e., Live Nation and Macys go up and down completely randomly.
Pair Corralation between Live Nation and Macys
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.88 times more return on investment than Macys. However, Live Nation Entertainment is 1.14 times less risky than Macys. It trades about 0.09 of its potential returns per unit of risk. Macys Inc is currently generating about -0.19 per unit of risk. If you would invest 13,315 in Live Nation Entertainment on November 29, 2024 and sell it today you would earn a total of 400.00 from holding Live Nation Entertainment or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Macys Inc
Performance |
| Timeline |
| Live Nation Entertainment |
| Macys Inc |
Live Nation and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Macys
The main advantage of trading using opposite Live Nation and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.| Live Nation vs. East Africa Metals | Live Nation vs. Calibre Mining Corp | Live Nation vs. De Grey Mining | Live Nation vs. CORNISH METALS INC |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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