Correlation Between LIFENET INSURANCE and Live Nation
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Live Nation Entertainment, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Live Nation.
Diversification Opportunities for LIFENET INSURANCE and Live Nation
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LIFENET and Live is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Live Nation go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Live Nation
Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 2.9 times less return on investment than Live Nation. In addition to that, LIFENET INSURANCE is 1.27 times more volatile than Live Nation Entertainment. It trades about 0.09 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 8,784 in Live Nation Entertainment on August 31, 2024 and sell it today you would earn a total of 4,406 from holding Live Nation Entertainment or generate 50.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Live Nation Entertainment
Performance |
| Timeline |
| LIFENET INSURANCE |
| Live Nation Entertainment |
LIFENET INSURANCE and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Live Nation
The main advantage of trading using opposite LIFENET INSURANCE and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. ONWARD MEDICAL BV | LIFENET INSURANCE vs. CHINA TONTINE WINES | LIFENET INSURANCE vs. ITALIAN WINE BRANDS | LIFENET INSURANCE vs. MELIA HOTELS |
| Live Nation vs. PLAYTECH | Live Nation vs. Playa Hotels Resorts | Live Nation vs. Sixt Leasing SE | Live Nation vs. Madison Square Garden |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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