Correlation Between Live Nation and XAAR PLC
Can any of the company-specific risk be diversified away by investing in both Live Nation and XAAR PLC 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 XAAR PLC 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 XAAR PLC LS 10, you can compare the effects of market volatilities on Live Nation and XAAR PLC 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 XAAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and XAAR PLC.
Diversification Opportunities for Live Nation and XAAR PLC
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and XAAR is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and XAAR PLC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAAR PLC LS 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 XAAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAAR PLC LS has no effect on the direction of Live Nation i.e., Live Nation and XAAR PLC go up and down completely randomly.
Pair Corralation between Live Nation and XAAR PLC
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.27 times more return on investment than XAAR PLC. However, Live Nation Entertainment is 3.73 times less risky than XAAR PLC. It trades about 0.15 of its potential returns per unit of risk. XAAR PLC LS 10 is currently generating about 0.0 per unit of risk. If you would invest 12,555 in Live Nation Entertainment on November 30, 2024 and sell it today you would earn a total of 985.00 from holding Live Nation Entertainment or generate 7.85% 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. XAAR PLC LS 10
Performance |
| Timeline |
| Live Nation Entertainment |
| XAAR PLC LS |
Live Nation and XAAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and XAAR PLC
The main advantage of trading using opposite Live Nation and XAAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, XAAR PLC 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 XAAR PLC will offset losses from the drop in XAAR PLC's long position.| Live Nation vs. Taylor Morn Home | Live Nation vs. BII Railway Transportation | Live Nation vs. Sporting Clube de | Live Nation vs. CAIRN HOMES EO |
| XAAR PLC vs. SAN MIGUEL BREWERY | XAAR PLC vs. Eurasia Mining Plc | XAAR PLC vs. Fevertree Drinks PLC | XAAR PLC vs. Aya Gold Silver |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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