Correlation Between Live Nation and Big Screen
Can any of the company-specific risk be diversified away by investing in both Live Nation and Big Screen 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 Big Screen 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 Big Screen Entertainment, you can compare the effects of market volatilities on Live Nation and Big Screen 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 Big Screen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Big Screen.
Diversification Opportunities for Live Nation and Big Screen
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Big is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Big Screen Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Screen Entertainment 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 Big Screen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Screen Entertainment has no effect on the direction of Live Nation i.e., Live Nation and Big Screen go up and down completely randomly.
Pair Corralation between Live Nation and Big Screen
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.26 times more return on investment than Big Screen. However, Live Nation Entertainment is 3.86 times less risky than Big Screen. It trades about 0.36 of its potential returns per unit of risk. Big Screen Entertainment is currently generating about 0.05 per unit of risk. If you would invest 11,881 in Live Nation Entertainment on August 30, 2024 and sell it today you would earn a total of 2,092 from holding Live Nation Entertainment or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Live Nation Entertainment vs. Big Screen Entertainment
Performance |
| Timeline |
| Live Nation Entertainment |
| Big Screen Entertainment |
Live Nation and Big Screen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Big Screen
The main advantage of trading using opposite Live Nation and Big Screen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Big Screen 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 Big Screen will offset losses from the drop in Big Screen's long position.| Live Nation vs. Liberty Media | Live Nation vs. Atlanta Braves Holdings, | Live Nation vs. News Corp B | Live Nation vs. News Corp A |
| Big Screen vs. Warner Music Group | Big Screen vs. Live Nation Entertainment | Big Screen vs. Atlanta Braves Holdings, | Big Screen vs. Warner Bros Discovery |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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