Correlation Between Live Nation and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both Live Nation and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL, you can compare the effects of market volatilities on Live Nation and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and CECO ENVIRONMENTAL.
Diversification Opportunities for Live Nation and CECO ENVIRONMENTAL
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Live and CECO is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of Live Nation i.e., Live Nation and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between Live Nation and CECO ENVIRONMENTAL
Assuming the 90 days horizon Live Nation is expected to generate 1.26 times less return on investment than CECO ENVIRONMENTAL. But when comparing it to its historical volatility, Live Nation Entertainment is 2.05 times less risky than CECO ENVIRONMENTAL. It trades about 0.36 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,426 in CECO ENVIRONMENTAL on August 28, 2024 and sell it today you would earn a total of 656.00 from holding CECO ENVIRONMENTAL or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| Live Nation Entertainment |
| CECO ENVIRONMENTAL |
Live Nation and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and CECO ENVIRONMENTAL
The main advantage of trading using opposite Live Nation and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL will offset losses from the drop in CECO ENVIRONMENTAL'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 |
| CECO ENVIRONMENTAL vs. INSURANCE AUST GRP | CECO ENVIRONMENTAL vs. TRADEDOUBLER AB SK | CECO ENVIRONMENTAL vs. The Hanover Insurance | CECO ENVIRONMENTAL vs. SALESFORCE INC CDR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Positions Ratings 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 | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |