Correlation Between Dupont De and Live Nation
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Live Nation Entertainment, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Live Nation.
Diversification Opportunities for Dupont De and Live Nation
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and Live is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Live Nation go up and down completely randomly.
Pair Corralation between Dupont De and Live Nation
Allowing for the 90-day total investment horizon Dupont De is expected to generate 12.67 times less return on investment than Live Nation. But when comparing it to its historical volatility, Dupont De Nemours is 1.36 times less risky than Live Nation. It trades about 0.02 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 8,582 in Live Nation Entertainment on August 29, 2024 and sell it today you would earn a total of 4,738 from holding Live Nation Entertainment or generate 55.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Dupont De Nemours vs. Live Nation Entertainment
Performance |
| Timeline |
| Dupont De Nemours |
| Live Nation Entertainment |
Dupont De and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Live Nation
The main advantage of trading using opposite Dupont De and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. Origin Agritech | Live Nation vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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