Correlation Between Live Nation and Nordstrom
Can any of the company-specific risk be diversified away by investing in both Live Nation and Nordstrom 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 Nordstrom 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 Nordstrom, you can compare the effects of market volatilities on Live Nation and Nordstrom 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 Nordstrom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Nordstrom.
Diversification Opportunities for Live Nation and Nordstrom
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Nordstrom is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment, and Nordstrom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordstrom 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 Nordstrom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordstrom has no effect on the direction of Live Nation i.e., Live Nation and Nordstrom go up and down completely randomly.
Pair Corralation between Live Nation and Nordstrom
If you would invest 15,840 in Live Nation Entertainment, on November 9, 2024 and sell it today you would earn a total of 1,258 from holding Live Nation Entertainment, or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment, vs. Nordstrom
Performance |
| Timeline |
| Live Nation Entertai |
| Nordstrom |
Live Nation and Nordstrom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Nordstrom
The main advantage of trading using opposite Live Nation and Nordstrom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Nordstrom 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 Nordstrom will offset losses from the drop in Nordstrom's long position.| Live Nation vs. T Mobile | Live Nation vs. Bemobi Mobile Tech | Live Nation vs. MAHLE Metal Leve | Live Nation vs. Globus Medical, |
| Nordstrom vs. Pure Storage, | Nordstrom vs. Bank of America | Nordstrom vs. Public Storage | Nordstrom vs. Apartment Investment and |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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