Correlation Between Live Nation and Rite Aid
Can any of the company-specific risk be diversified away by investing in both Live Nation and Rite Aid 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 Rite Aid 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 Rite Aid, you can compare the effects of market volatilities on Live Nation and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Rite Aid.
Diversification Opportunities for Live Nation and Rite Aid
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and Rite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of Live Nation i.e., Live Nation and Rite Aid go up and down completely randomly.
Pair Corralation between Live Nation and Rite Aid
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.27 times more return on investment than Rite Aid. However, Live Nation Entertainment is 3.69 times less risky than Rite Aid. It trades about 0.08 of its potential returns per unit of risk. Rite Aid is currently generating about -0.04 per unit of risk. If you would invest 6,619 in Live Nation Entertainment on September 12, 2024 and sell it today you would earn a total of 6,306 from holding Live Nation Entertainment or generate 95.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Live Nation Entertainment vs. Rite Aid
Performance |
| Timeline |
| Live Nation Entertainment |
| Rite Aid |
Live Nation and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Rite Aid
The main advantage of trading using opposite Live Nation and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid'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 |
| Rite Aid vs. Sixt Leasing SE | Rite Aid vs. Live Nation Entertainment | Rite Aid vs. CNVISION MEDIA | Rite Aid vs. Air Lease |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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