Correlation Between Live Nation and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Live Nation and RCS MediaGroup 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 RCS MediaGroup 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 RCS MediaGroup SpA, you can compare the effects of market volatilities on Live Nation and RCS MediaGroup 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 RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and RCS MediaGroup.
Diversification Opportunities for Live Nation and RCS MediaGroup
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and RCS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA 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 RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Live Nation i.e., Live Nation and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Live Nation and RCS MediaGroup
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.37 times more return on investment than RCS MediaGroup. However, Live Nation Entertainment is 2.72 times less risky than RCS MediaGroup. It trades about 0.1 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.01 per unit of risk. If you would invest 12,720 in Live Nation Entertainment on October 20, 2024 and sell it today you would earn a total of 195.00 from holding Live Nation Entertainment or generate 1.53% 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. RCS MediaGroup SpA
Performance |
| Timeline |
| Live Nation Entertainment |
| RCS MediaGroup SpA |
Live Nation and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and RCS MediaGroup
The main advantage of trading using opposite Live Nation and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.| Live Nation vs. DELTA AIR LINES | Live Nation vs. SYSTEMAIR AB | Live Nation vs. Tencent Music Entertainment | Live Nation vs. GEAR4MUSIC LS 10 |
| RCS MediaGroup vs. Charter Communications | RCS MediaGroup vs. Stag Industrial | RCS MediaGroup vs. COMPUTERSHARE | RCS MediaGroup vs. Rocket Internet SE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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