Correlation Between Live Nation and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Live Nation and Talanx 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 Talanx 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 Talanx AG, you can compare the effects of market volatilities on Live Nation and Talanx 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Talanx AG.
Diversification Opportunities for Live Nation and Talanx AG
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Live and Talanx is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Live Nation i.e., Live Nation and Talanx AG go up and down completely randomly.
Pair Corralation between Live Nation and Talanx AG
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 2.19 times more return on investment than Talanx AG. However, Live Nation is 2.19 times more volatile than Talanx AG. It trades about 0.35 of its potential returns per unit of risk. Talanx AG is currently generating about 0.41 per unit of risk. If you would invest 10,710 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 2,485 from holding Live Nation Entertainment or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Talanx AG
Performance |
| Timeline |
| Live Nation Entertainment |
| Talanx AG |
Live Nation and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Talanx AG
The main advantage of trading using opposite Live Nation and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Talanx 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| Live Nation vs. CAREER EDUCATION | Live Nation vs. ALGOMA STEEL GROUP | Live Nation vs. Xinhua Winshare Publishing | Live Nation vs. CHINA EDUCATION GROUP |
| Talanx AG vs. Retail Estates NV | Talanx AG vs. COMMERCIAL VEHICLE | Talanx AG vs. Geely Automobile Holdings | Talanx AG vs. Commercial Vehicle Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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