Correlation Between DAX Index and Live Nation

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DAX Index 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 DAX Index and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAX Index and Live Nation Entertainment, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Live Nation.

Diversification Opportunities for DAX Index and Live Nation

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between DAX and Live is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Live Nation go up and down completely randomly.
    Optimize

Pair Corralation between DAX Index and Live Nation

Assuming the 90 days trading horizon DAX Index is expected to generate 7.44 times less return on investment than Live Nation. But when comparing it to its historical volatility, DAX Index is 3.03 times less risky than Live Nation. It trades about 0.14 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.35 of returns per unit of risk over similar time horizon. 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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

DAX Index  vs.  Live Nation Entertainment

 Performance 
       Timeline  

DAX Index and Live Nation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DAX Index and Live Nation

The main advantage of trading using opposite DAX Index and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.
DAX Index vs. BE Semiconductor Industries
DAX Index vs. REGAL ASIAN INVESTMENTS
DAX Index vs. SEI INVESTMENTS
DAX Index vs. National Beverage Corp
The idea behind DAX Index and Live Nation Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY