Correlation Between Fuji Media and Live Nation
Can any of the company-specific risk be diversified away by investing in both Fuji Media 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 Fuji Media and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and Live Nation Entertainment, you can compare the effects of market volatilities on Fuji Media 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 Fuji Media with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and Live Nation.
Diversification Opportunities for Fuji Media and Live Nation
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fuji and Live is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings 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 Fuji Media 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 Fuji Media Holdings 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 Fuji Media i.e., Fuji Media and Live Nation go up and down completely randomly.
Pair Corralation between Fuji Media and Live Nation
Assuming the 90 days trading horizon Fuji Media Holdings is expected to under-perform the Live Nation. In addition to that, Fuji Media is 2.3 times more volatile than Live Nation Entertainment. It trades about -0.25 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.13 per unit of volatility. If you would invest 12,670 in Live Nation Entertainment on October 12, 2024 and sell it today you would lose (300.00) from holding Live Nation Entertainment or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. Live Nation Entertainment
Performance |
| Timeline |
| Fuji Media Holdings |
| Live Nation Entertainment |
Fuji Media and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and Live Nation
The main advantage of trading using opposite Fuji Media and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media 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.| Fuji Media vs. Commonwealth Bank of | Fuji Media vs. Virtu Financial | Fuji Media vs. Corsair Gaming | Fuji Media vs. Westinghouse Air Brake |
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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.
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