Correlation Between Live Nation and Eco Depot
Can any of the company-specific risk be diversified away by investing in both Live Nation and Eco Depot 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 Eco Depot 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 Eco Depot, you can compare the effects of market volatilities on Live Nation and Eco Depot 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 Eco Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Eco Depot.
Diversification Opportunities for Live Nation and Eco Depot
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Eco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Eco Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Depot 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 Eco Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Depot has no effect on the direction of Live Nation i.e., Live Nation and Eco Depot go up and down completely randomly.
Pair Corralation between Live Nation and Eco Depot
Considering the 90-day investment horizon Live Nation Entertainment is expected to under-perform the Eco Depot. But the stock apears to be less risky and, when comparing its historical volatility, Live Nation Entertainment is 8.09 times less risky than Eco Depot. The stock trades about -0.11 of its potential returns per unit of risk. The Eco Depot is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6.98 in Eco Depot on January 5, 2025 and sell it today you would lose (1.60) from holding Eco Depot or give up 22.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Eco Depot
Performance |
| Timeline |
| Live Nation Entertainment |
| Eco Depot |
Live Nation and Eco Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Eco Depot
The main advantage of trading using opposite Live Nation and Eco Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Eco Depot 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 Eco Depot will offset losses from the drop in Eco Depot'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 |
| Eco Depot vs. Next Generation Management | Eco Depot vs. Cardiff Lexington Corp | Eco Depot vs. Sack Lunch Productions | Eco Depot vs. Energy Revenue Amer |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |