Correlation Between Pop Culture and Live Nation
Can any of the company-specific risk be diversified away by investing in both Pop Culture 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 Pop Culture and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pop Culture Group and Live Nation Entertainment, you can compare the effects of market volatilities on Pop Culture 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 Pop Culture with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pop Culture and Live Nation.
Diversification Opportunities for Pop Culture and Live Nation
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pop and Live is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pop Culture 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 Pop Culture 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 Pop Culture 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 Pop Culture i.e., Pop Culture and Live Nation go up and down completely randomly.
Pair Corralation between Pop Culture and Live Nation
Given the investment horizon of 90 days Pop Culture is expected to generate 6.7 times less return on investment than Live Nation. In addition to that, Pop Culture is 4.55 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 0.21 per unit of volatility. If you would invest 9,435 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 4,390 from holding Live Nation Entertainment or generate 46.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pop Culture Group vs. Live Nation Entertainment
Performance |
| Timeline |
| Pop Culture Group |
| Live Nation Entertainment |
Pop Culture and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pop Culture and Live Nation
The main advantage of trading using opposite Pop Culture and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pop Culture 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.| Pop Culture vs. Hollywall Entertainment | Pop Culture vs. Kuke Music Holding | Pop Culture vs. Reading International | Pop Culture vs. Reservoir Media |
| Live Nation vs. Liberty Media | Live Nation vs. Atlanta Braves Holdings, | Live Nation vs. News Corp B | Live Nation vs. News Corp A |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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