Correlation Between Live Nation and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Live Nation and SalMar ASA 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 SalMar ASA 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 SalMar ASA, you can compare the effects of market volatilities on Live Nation and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and SalMar ASA.
Diversification Opportunities for Live Nation and SalMar ASA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and SalMar is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Live Nation i.e., Live Nation and SalMar ASA go up and down completely randomly.
Pair Corralation between Live Nation and SalMar ASA
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 1.43 times more return on investment than SalMar ASA. However, Live Nation is 1.43 times more volatile than SalMar ASA. It trades about 0.31 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.07 per unit of risk. If you would invest 10,920 in Live Nation Entertainment on August 31, 2024 and sell it today you would earn a total of 2,270 from holding Live Nation Entertainment or generate 20.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. SalMar ASA
Performance |
| Timeline |
| Live Nation Entertainment |
| SalMar ASA |
Live Nation and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and SalMar ASA
The main advantage of trading using opposite Live Nation and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Live Nation vs. PLAYTECH | Live Nation vs. Playa Hotels Resorts | Live Nation vs. Sixt Leasing SE | Live Nation vs. Madison Square Garden |
| SalMar ASA vs. Live Nation Entertainment | SalMar ASA vs. International Consolidated Airlines | SalMar ASA vs. TOWNSQUARE MEDIA INC | SalMar ASA vs. ITALIAN WINE BRANDS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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