Correlation Between ARDAGH METAL and Live Nation
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Live Nation 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 ARDAGH METAL and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Live Nation Entertainment, you can compare the effects of market volatilities on ARDAGH METAL and Live Nation 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 ARDAGH METAL with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Live Nation.
Diversification Opportunities for ARDAGH METAL and Live Nation
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ARDAGH and Live is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Live Nation go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Live Nation
Assuming the 90 days horizon ARDAGH METAL is expected to generate 7.43 times less return on investment than Live Nation. In addition to that, ARDAGH METAL is 1.18 times more volatile than Live Nation Entertainment. It trades about 0.04 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.35 per unit of volatility. If you would invest 10,710 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 2,475 from holding Live Nation Entertainment or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Live Nation Entertainment
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Live Nation Entertainment |
ARDAGH METAL and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Live Nation
The main advantage of trading using opposite ARDAGH METAL and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| ARDAGH METAL vs. Charter Communications | ARDAGH METAL vs. Cogent Communications Holdings | ARDAGH METAL vs. Computershare Limited | ARDAGH METAL vs. Verizon Communications |
| Live Nation vs. CAREER EDUCATION | Live Nation vs. ALGOMA STEEL GROUP | Live Nation vs. Xinhua Winshare Publishing | Live Nation vs. CHINA EDUCATION 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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