Correlation Between Live Nation and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Live Nation and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha 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 Siemens Aktiengesellschaft, you can compare the effects of market volatilities on Live Nation and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Siemens Aktiengesellscha.
Diversification Opportunities for Live Nation and Siemens Aktiengesellscha
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Siemens is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Live Nation i.e., Live Nation and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between Live Nation and Siemens Aktiengesellscha
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 1.3 times more return on investment than Siemens Aktiengesellscha. However, Live Nation is 1.3 times more volatile than Siemens Aktiengesellschaft. It trades about 0.32 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.18 per unit of risk. If you would invest 8,810 in Live Nation Entertainment on September 12, 2024 and sell it today you would earn a total of 4,115 from holding Live Nation Entertainment or generate 46.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| Live Nation Entertainment |
| Siemens Aktiengesellscha |
Live Nation and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Siemens Aktiengesellscha
The main advantage of trading using opposite Live Nation and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Siemens Aktiengesellscha 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 Siemens Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha'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 |
| Siemens Aktiengesellscha vs. GAMESTOP | Siemens Aktiengesellscha vs. Hochschild Mining plc | Siemens Aktiengesellscha vs. International Game Technology | Siemens Aktiengesellscha vs. Scientific Games |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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