Correlation Between Live Nation and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Live Nation and Imax 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 Imax 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 Imax Corp, you can compare the effects of market volatilities on Live Nation and Imax 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Imax Corp.
Diversification Opportunities for Live Nation and Imax Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Live and Imax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Live Nation i.e., Live Nation and Imax Corp go up and down completely randomly.
Pair Corralation between Live Nation and Imax Corp
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.62 times more return on investment than Imax Corp. However, Live Nation Entertainment is 1.62 times less risky than Imax Corp. It trades about 0.39 of its potential returns per unit of risk. Imax Corp is currently generating about 0.14 per unit of risk. If you would invest 9,695 in Live Nation Entertainment on August 28, 2024 and sell it today you would earn a total of 4,359 from holding Live Nation Entertainment or generate 44.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Imax Corp
Performance |
| Timeline |
| Live Nation Entertainment |
| Imax Corp |
Live Nation and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Imax Corp
The main advantage of trading using opposite Live Nation and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Imax 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 Imax Corp will offset losses from the drop in Imax 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 |
| Imax Corp vs. Marcus | Imax Corp vs. Dave Busters Entertainment | Imax Corp vs. AMC Networks | Imax Corp vs. News Corp A |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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