Correlation Between AOYAMA TRADING and Live Nation
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING 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 AOYAMA TRADING and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and Live Nation Entertainment, you can compare the effects of market volatilities on AOYAMA TRADING 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 AOYAMA TRADING with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Live Nation.
Diversification Opportunities for AOYAMA TRADING and Live Nation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AOYAMA and Live is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING i.e., AOYAMA TRADING and Live Nation go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and Live Nation
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 78.49 times less return on investment than Live Nation. In addition to that, AOYAMA TRADING is 1.4 times more volatile than Live Nation Entertainment. It trades about 0.01 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.58 per unit of volatility. If you would invest 12,550 in Live Nation Entertainment on November 5, 2024 and sell it today you would earn a total of 1,270 from holding Live Nation Entertainment or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. Live Nation Entertainment
Performance |
| Timeline |
| AOYAMA TRADING |
| Live Nation Entertainment |
AOYAMA TRADING and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and Live Nation
The main advantage of trading using opposite AOYAMA TRADING and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING 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.| AOYAMA TRADING vs. International Game Technology | AOYAMA TRADING vs. Inspire Medical Systems | AOYAMA TRADING vs. CVR Medical Corp | AOYAMA TRADING vs. Boyd Gaming |
| Live Nation vs. Apollo Investment Corp | Live Nation vs. Lattice Semiconductor | Live Nation vs. Scottish Mortgage Investment | Live Nation vs. ScanSource |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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