Correlation Between Discover Financial and Live Nation
Can any of the company-specific risk be diversified away by investing in both Discover Financial 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 Discover Financial and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Live Nation Entertainment,, you can compare the effects of market volatilities on Discover Financial 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 Discover Financial with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Live Nation.
Diversification Opportunities for Discover Financial and Live Nation
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Discover and Live is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services 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 Discover Financial 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 Discover Financial Services 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 Discover Financial i.e., Discover Financial and Live Nation go up and down completely randomly.
Pair Corralation between Discover Financial and Live Nation
Assuming the 90 days trading horizon Discover Financial is expected to generate 1.01 times less return on investment than Live Nation. In addition to that, Discover Financial is 1.14 times more volatile than Live Nation Entertainment,. It trades about 0.08 of its total potential returns per unit of risk. Live Nation Entertainment, is currently generating about 0.09 per unit of volatility. If you would invest 7,945 in Live Nation Entertainment, on November 1, 2024 and sell it today you would earn a total of 8,830 from holding Live Nation Entertainment, or generate 111.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. Live Nation Entertainment,
Performance |
| Timeline |
| Discover Financial |
| Live Nation Entertai |
Discover Financial and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Live Nation
The main advantage of trading using opposite Discover Financial and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial 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.| Discover Financial vs. Lloyds Banking Group | Discover Financial vs. MAHLE Metal Leve | Discover Financial vs. Mitsubishi UFJ Financial | Discover Financial vs. METISA Metalrgica Timboense |
| Live Nation vs. Credit Acceptance | Live Nation vs. Lloyds Banking Group | Live Nation vs. LPL Financial Holdings | Live Nation vs. Discover Financial Services |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |