Correlation Between Live Nation and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Live Nation and Academy Sports 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 Live Nation and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment, and Academy Sports and, you can compare the effects of market volatilities on Live Nation and Academy Sports 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 Live Nation with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Academy Sports.
Diversification Opportunities for Live Nation and Academy Sports
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Academy is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment, and Academy Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports and Live Nation 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 Live Nation Entertainment, are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports has no effect on the direction of Live Nation i.e., Live Nation and Academy Sports go up and down completely randomly.
Pair Corralation between Live Nation and Academy Sports
Assuming the 90 days trading horizon Live Nation Entertainment, is expected to generate 2.22 times more return on investment than Academy Sports. However, Live Nation is 2.22 times more volatile than Academy Sports and. It trades about 0.29 of its potential returns per unit of risk. Academy Sports and is currently generating about -0.34 per unit of risk. If you would invest 15,712 in Live Nation Entertainment, on November 3, 2024 and sell it today you would earn a total of 1,135 from holding Live Nation Entertainment, or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Live Nation Entertainment, vs. Academy Sports and
Performance |
| Timeline |
| Live Nation Entertai |
| Academy Sports |
Live Nation and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Academy Sports
The main advantage of trading using opposite Live Nation and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Live Nation vs. CM Hospitalar SA | Live Nation vs. Omega Healthcare Investors, | Live Nation vs. Metalurgica Gerdau SA | Live Nation vs. DXC Technology |
| Academy Sports vs. Spotify Technology SA | Academy Sports vs. KB Financial Group | Academy Sports vs. Prudential Financial | Academy Sports vs. Deutsche Bank Aktiengesellschaft |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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