Correlation Between Live Nation and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Live Nation and Flutter Entertainment 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 Flutter Entertainment 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 Flutter Entertainment PLC, you can compare the effects of market volatilities on Live Nation and Flutter Entertainment 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 Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Flutter Entertainment.
Diversification Opportunities for Live Nation and Flutter Entertainment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Live and Flutter is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC 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 Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of Live Nation i.e., Live Nation and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Live Nation and Flutter Entertainment
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 1.3 times more return on investment than Flutter Entertainment. However, Live Nation is 1.3 times more volatile than Flutter Entertainment PLC. It trades about 0.3 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.34 per unit of risk. If you would invest 10,565 in Live Nation Entertainment on August 25, 2024 and sell it today you would earn a total of 2,100 from holding Live Nation Entertainment or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Flutter Entertainment PLC
Performance |
| Timeline |
| Live Nation Entertainment |
| Flutter Entertainment PLC |
Live Nation and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Flutter Entertainment
The main advantage of trading using opposite Live Nation and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Flutter Entertainment 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 Flutter Entertainment will offset losses from the drop in Flutter Entertainment's long position.| Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. Origin Agritech | Live Nation vs. SIVERS SEMICONDUCTORS AB |
| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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