Correlation Between Live Nation and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Live Nation and Fifth Third 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 Fifth Third 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 Fifth Third Bancorp, you can compare the effects of market volatilities on Live Nation and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Fifth Third.
Diversification Opportunities for Live Nation and Fifth Third
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and Fifth is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Live Nation i.e., Live Nation and Fifth Third go up and down completely randomly.
Pair Corralation between Live Nation and Fifth Third
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.89 times more return on investment than Fifth Third. However, Live Nation Entertainment is 1.12 times less risky than Fifth Third. It trades about 0.07 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.05 per unit of risk. If you would invest 6,742 in Live Nation Entertainment on October 11, 2024 and sell it today you would earn a total of 5,808 from holding Live Nation Entertainment or generate 86.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Fifth Third Bancorp
Performance |
| Timeline |
| Live Nation Entertainment |
| Fifth Third Bancorp |
Live Nation and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Fifth Third
The main advantage of trading using opposite Live Nation and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Live Nation vs. Commonwealth Bank of | Live Nation vs. SOCKET MOBILE NEW | Live Nation vs. Spirent Communications plc | Live Nation vs. Geely Automobile Holdings |
| Fifth Third vs. Fortescue Metals Group | Fifth Third vs. PARKEN Sport Entertainment | Fifth Third vs. Live Nation Entertainment | Fifth Third vs. PRECISION DRILLING P |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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