Correlation Between JD SPORTS and Live Nation
Can any of the company-specific risk be diversified away by investing in both JD SPORTS 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 JD SPORTS and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD SPORTS FASH and Live Nation Entertainment, you can compare the effects of market volatilities on JD SPORTS 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 JD SPORTS with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Live Nation.
Diversification Opportunities for JD SPORTS and Live Nation
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 9JD and Live is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH 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 JD SPORTS 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 JD SPORTS FASH 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 JD SPORTS i.e., JD SPORTS and Live Nation go up and down completely randomly.
Pair Corralation between JD SPORTS and Live Nation
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Live Nation. In addition to that, JD SPORTS is 1.53 times more volatile than Live Nation Entertainment. It trades about -0.16 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 10,760 in Live Nation Entertainment on September 4, 2024 and sell it today you would earn a total of 2,425 from holding Live Nation Entertainment or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Live Nation Entertainment
Performance |
| Timeline |
| JD SPORTS FASH |
| Live Nation Entertainment |
JD SPORTS and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Live Nation
The main advantage of trading using opposite JD SPORTS and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS 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.| JD SPORTS vs. ASURE SOFTWARE | JD SPORTS vs. CyberArk Software | JD SPORTS vs. UPDATE SOFTWARE | JD SPORTS vs. Kaiser Aluminum |
| Live Nation vs. Dolby Laboratories | Live Nation vs. CTS Eventim AG | Live Nation vs. Toho Co | Live Nation vs. Lions Gate Entertainment |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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