Correlation Between Live Nation and Trade Desk
Can any of the company-specific risk be diversified away by investing in both Live Nation and Trade Desk 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 Trade Desk 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 The Trade Desk, you can compare the effects of market volatilities on Live Nation and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Trade Desk.
Diversification Opportunities for Live Nation and Trade Desk
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Trade is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment, and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Live Nation i.e., Live Nation and Trade Desk go up and down completely randomly.
Pair Corralation between Live Nation and Trade Desk
Assuming the 90 days trading horizon Live Nation is expected to generate 1.76 times less return on investment than Trade Desk. But when comparing it to its historical volatility, Live Nation Entertainment, is 2.22 times less risky than Trade Desk. It trades about 0.08 of its potential returns per unit of risk. The Trade Desk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 268.00 in The Trade Desk on October 27, 2024 and sell it today you would earn a total of 436.00 from holding The Trade Desk or generate 162.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
Live Nation Entertainment, vs. The Trade Desk
Performance |
| Timeline |
| Live Nation Entertai |
| Trade Desk |
Live Nation and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Trade Desk
The main advantage of trading using opposite Live Nation and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| Live Nation vs. MAHLE Metal Leve | Live Nation vs. Verizon Communications | Live Nation vs. Check Point Software | Live Nation vs. Charter Communications |
| Trade Desk vs. Guidewire Software, | Trade Desk vs. Check Point Software | Trade Desk vs. Unity Software | Trade Desk vs. Take Two Interactive Software |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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