Correlation Between Citigroup and Live Nation
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Live Nation Entertainment, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Live Nation.
Diversification Opportunities for Citigroup and Live Nation
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Live is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Live Nation go up and down completely randomly.
Pair Corralation between Citigroup and Live Nation
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.85 times less return on investment than Live Nation. But when comparing it to its historical volatility, Citigroup is 1.34 times less risky than Live Nation. It trades about 0.26 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 10,710 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 2,485 from holding Live Nation Entertainment or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Live Nation Entertainment
Performance |
| Timeline |
| Citigroup |
| Live Nation Entertainment |
Citigroup and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Live Nation
The main advantage of trading using opposite Citigroup and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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