Correlation Between LPL Financial and Live Nation
Can any of the company-specific risk be diversified away by investing in both LPL Financial 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 LPL Financial and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPL Financial Holdings and Live Nation Entertainment,, you can compare the effects of market volatilities on LPL Financial 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 LPL Financial with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPL Financial and Live Nation.
Diversification Opportunities for LPL Financial and Live Nation
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPL and Live is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Live Nation Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertai and LPL Financial 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 LPL Financial 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 Entertai has no effect on the direction of LPL Financial i.e., LPL Financial and Live Nation go up and down completely randomly.
Pair Corralation between LPL Financial and Live Nation
Assuming the 90 days trading horizon LPL Financial is expected to generate 1.09 times less return on investment than Live Nation. In addition to that, LPL Financial is 1.26 times more volatile than Live Nation Entertainment,. It trades about 0.12 of its total potential returns per unit of risk. Live Nation Entertainment, is currently generating about 0.16 per unit of volatility. If you would invest 8,829 in Live Nation Entertainment, on November 8, 2024 and sell it today you would earn a total of 8,452 from holding Live Nation Entertainment, or generate 95.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.59% |
| Values | Daily Returns |
LPL Financial Holdings vs. Live Nation Entertainment,
Performance |
| Timeline |
| LPL Financial Holdings |
| Live Nation Entertai |
LPL Financial and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPL Financial and Live Nation
The main advantage of trading using opposite LPL Financial and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPL Financial 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.| LPL Financial vs. GP Investments | LPL Financial vs. CVS Health | LPL Financial vs. Martin Marietta Materials, | LPL Financial vs. Annaly Capital Management, |
| Live Nation vs. Electronic Arts | Live Nation vs. Costco Wholesale | Live Nation vs. SVB Financial Group | Live Nation vs. Jefferies Financial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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