Correlation Between Live Nation and Fox Corp
Can any of the company-specific risk be diversified away by investing in both Live Nation and Fox Corp 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 Fox Corp 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 Fox Corp Class, you can compare the effects of market volatilities on Live Nation and Fox Corp 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 Fox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Fox Corp.
Diversification Opportunities for Live Nation and Fox Corp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and Fox is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Fox Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Corp Class 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 Fox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Corp Class has no effect on the direction of Live Nation i.e., Live Nation and Fox Corp go up and down completely randomly.
Pair Corralation between Live Nation and Fox Corp
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 1.31 times more return on investment than Fox Corp. However, Live Nation is 1.31 times more volatile than Fox Corp Class. It trades about 0.08 of its potential returns per unit of risk. Fox Corp Class is currently generating about 0.06 per unit of risk. If you would invest 7,388 in Live Nation Entertainment on August 24, 2024 and sell it today you would earn a total of 6,469 from holding Live Nation Entertainment or generate 87.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Fox Corp Class
Performance |
| Timeline |
| Live Nation Entertainment |
| Fox Corp Class |
Live Nation and Fox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Fox Corp
The main advantage of trading using opposite Live Nation and Fox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Fox Corp 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 Fox Corp will offset losses from the drop in Fox Corp'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 |
| Fox Corp vs. News Corp B | Fox Corp vs. News Corp A | Fox Corp vs. Live Nation Entertainment | Fox Corp vs. Paramount Global Class |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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