Correlation Between Live Nation and SIKA AG
Can any of the company-specific risk be diversified away by investing in both Live Nation and SIKA AG 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 SIKA AG 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 SIKA AG UNSPADR, you can compare the effects of market volatilities on Live Nation and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and SIKA AG.
Diversification Opportunities for Live Nation and SIKA AG
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and SIKA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Live Nation i.e., Live Nation and SIKA AG go up and down completely randomly.
Pair Corralation between Live Nation and SIKA AG
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.83 times more return on investment than SIKA AG. However, Live Nation Entertainment is 1.21 times less risky than SIKA AG. It trades about 0.2 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about -0.05 per unit of risk. If you would invest 11,090 in Live Nation Entertainment on November 6, 2024 and sell it today you would earn a total of 2,730 from holding Live Nation Entertainment or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Live Nation Entertainment vs. SIKA AG UNSPADR
Performance |
| Timeline |
| Live Nation Entertainment |
| SIKA AG UNSPADR |
Live Nation and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and SIKA AG
The main advantage of trading using opposite Live Nation and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| Live Nation vs. Air Transport Services | Live Nation vs. USWE SPORTS AB | Live Nation vs. SCIENCE IN SPORT | Live Nation vs. SOGECLAIR SA INH |
| SIKA AG vs. BII Railway Transportation | SIKA AG vs. PLAYMATES TOYS | SIKA AG vs. PARKEN Sport Entertainment | SIKA AG vs. Yuexiu Transport Infrastructure |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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