Correlation Between CHINA EDUCATION and Live Nation
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Live Nation Entertainment, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Live Nation.
Diversification Opportunities for CHINA EDUCATION and Live Nation
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHINA and Live is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Live Nation go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Live Nation
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Live Nation. In addition to that, CHINA EDUCATION is 1.67 times more volatile than Live Nation Entertainment. It trades about -0.23 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 10,710 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Live Nation Entertainment
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Live Nation Entertainment |
CHINA EDUCATION and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Live Nation
The main advantage of trading using opposite CHINA EDUCATION and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. DALATA HOTEL | CHINA EDUCATION vs. Choice Hotels International | CHINA EDUCATION vs. Soken Chemical Engineering | CHINA EDUCATION vs. Host Hotels Resorts |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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