Correlation Between Geely Automobile and Live Nation
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Live Nation Entertainment, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Live Nation.
Diversification Opportunities for Geely Automobile and Live Nation
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geely and Live is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile 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 Geely Automobile 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 Geely Automobile 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 Geely Automobile i.e., Geely Automobile and Live Nation go up and down completely randomly.
Pair Corralation between Geely Automobile and Live Nation
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.45 times more return on investment than Live Nation. However, Geely Automobile is 1.45 times more volatile than Live Nation Entertainment. It trades about 0.06 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.07 per unit of risk. If you would invest 94.00 in Geely Automobile Holdings on October 11, 2024 and sell it today you would earn a total of 83.00 from holding Geely Automobile Holdings or generate 88.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Live Nation Entertainment
Performance |
| Timeline |
| Geely Automobile Holdings |
| Live Nation Entertainment |
Geely Automobile and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Live Nation
The main advantage of trading using opposite Geely Automobile and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. Hemisphere Energy Corp | Geely Automobile vs. Nippon Steel | Geely Automobile vs. Shenandoah Telecommunications | Geely Automobile vs. Liberty Broadband |
| Live Nation vs. Direct Line Insurance | Live Nation vs. HANOVER INSURANCE | Live Nation vs. VIENNA INSURANCE GR | Live Nation vs. FAST RETAIL ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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