Correlation Between Live Nation and Pop Culture
Can any of the company-specific risk be diversified away by investing in both Live Nation and Pop Culture 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 Pop Culture 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 Pop Culture Group, you can compare the effects of market volatilities on Live Nation and Pop Culture 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 Pop Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Pop Culture.
Diversification Opportunities for Live Nation and Pop Culture
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Pop is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Pop Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pop Culture Group 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 Pop Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pop Culture Group has no effect on the direction of Live Nation i.e., Live Nation and Pop Culture go up and down completely randomly.
Pair Corralation between Live Nation and Pop Culture
Considering the 90-day investment horizon Live Nation is expected to generate 2.91 times less return on investment than Pop Culture. But when comparing it to its historical volatility, Live Nation Entertainment is 9.45 times less risky than Pop Culture. It trades about 0.13 of its potential returns per unit of risk. Pop Culture Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Pop Culture Group on November 3, 2024 and sell it today you would lose (38.00) from holding Pop Culture Group or give up 36.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Live Nation Entertainment vs. Pop Culture Group
Performance |
| Timeline |
| Live Nation Entertainment |
| Pop Culture Group |
Live Nation and Pop Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Pop Culture
The main advantage of trading using opposite Live Nation and Pop Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Pop Culture 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 Pop Culture will offset losses from the drop in Pop Culture'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 |
| Pop Culture vs. Hollywall Entertainment | Pop Culture vs. Kuke Music Holding | Pop Culture vs. Reading International | Pop Culture vs. Reservoir Media |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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