Correlation Between LiveOne and Live Nation

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Can any of the company-specific risk be diversified away by investing in both LiveOne 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 LiveOne and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LiveOne and Live Nation Entertainment, you can compare the effects of market volatilities on LiveOne 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 LiveOne with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiveOne and Live Nation.

Diversification Opportunities for LiveOne and Live Nation

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between LiveOne and Live is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne 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 LiveOne 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 LiveOne 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 LiveOne i.e., LiveOne and Live Nation go up and down completely randomly.

Pair Corralation between LiveOne and Live Nation

Considering the 90-day investment horizon LiveOne is expected to generate 3.63 times more return on investment than Live Nation. However, LiveOne is 3.63 times more volatile than Live Nation Entertainment. It trades about 0.3 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.36 per unit of risk. If you would invest  62.00  in LiveOne on August 30, 2024 and sell it today you would earn a total of  35.00  from holding LiveOne or generate 56.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

LiveOne  vs.  Live Nation Entertainment

 Performance 
       Timeline  
LiveOne 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LiveOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Live Nation Entertainment 

Risk-Adjusted Performance

29 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Live Nation showed solid returns over the last few months and may actually be approaching a breakup point.

LiveOne and Live Nation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LiveOne and Live Nation

The main advantage of trading using opposite LiveOne and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiveOne 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.
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The idea behind LiveOne and Live Nation Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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