Correlation Between Live Nation and Grammer AG
Can any of the company-specific risk be diversified away by investing in both Live Nation and Grammer AG 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 Grammer AG 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 Grammer AG, you can compare the effects of market volatilities on Live Nation and Grammer AG 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 Grammer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Grammer AG.
Diversification Opportunities for Live Nation and Grammer AG
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and Grammer is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Grammer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grammer AG 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 Grammer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grammer AG has no effect on the direction of Live Nation i.e., Live Nation and Grammer AG go up and down completely randomly.
Pair Corralation between Live Nation and Grammer AG
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.96 times more return on investment than Grammer AG. However, Live Nation Entertainment is 1.04 times less risky than Grammer AG. It trades about 0.23 of its potential returns per unit of risk. Grammer AG is currently generating about -0.47 per unit of risk. If you would invest 11,450 in Live Nation Entertainment on September 12, 2024 and sell it today you would earn a total of 1,475 from holding Live Nation Entertainment or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Live Nation Entertainment vs. Grammer AG
Performance |
| Timeline |
| Live Nation Entertainment |
| Grammer AG |
Live Nation and Grammer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Grammer AG
The main advantage of trading using opposite Live Nation and Grammer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Grammer AG 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 Grammer AG will offset losses from the drop in Grammer AG's long position.| Live Nation vs. SLR Investment Corp | Live Nation vs. Gladstone Investment | Live Nation vs. CapitaLand Investment Limited | Live Nation vs. PPHE HOTEL GROUP |
| Grammer AG vs. CompuGroup Medical SE | Grammer AG vs. Apollo Medical Holdings | Grammer AG vs. SOLSTAD OFFSHORE NK | Grammer AG vs. Japan Medical Dynamic |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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