Correlation Between Academy Sports and Live Nation
Can any of the company-specific risk be diversified away by investing in both Academy 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 Academy 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 Academy Sports and and Live Nation Entertainment,, you can compare the effects of market volatilities on Academy 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 Academy Sports with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Live Nation.
Diversification Opportunities for Academy Sports and Live Nation
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Academy and Live is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Live Nation Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertai and Academy 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 Academy Sports and 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 Entertai has no effect on the direction of Academy Sports i.e., Academy Sports and Live Nation go up and down completely randomly.
Pair Corralation between Academy Sports and Live Nation
Assuming the 90 days trading horizon Academy Sports and is expected to under-perform the Live Nation. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports and is 4.12 times less risky than Live Nation. The stock trades about -0.27 of its potential returns per unit of risk. The Live Nation Entertainment, is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,416 in Live Nation Entertainment, on October 24, 2024 and sell it today you would earn a total of 354.00 from holding Live Nation Entertainment, or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Academy Sports and vs. Live Nation Entertainment,
Performance |
| Timeline |
| Academy Sports |
| Live Nation Entertai |
Academy Sports and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Live Nation
The main advantage of trading using opposite Academy Sports and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy 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.| Academy Sports vs. Metalrgica Riosulense SA | Academy Sports vs. Tyson Foods | Academy Sports vs. Costco Wholesale | Academy Sports vs. MAHLE Metal Leve |
| Live Nation vs. Intelbras SA | Live Nation vs. Neogrid Participaes SA | Live Nation vs. Mliuz SA | Live Nation vs. Locaweb Servios de |
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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