Correlation Between Live Nation and Manchester United
Can any of the company-specific risk be diversified away by investing in both Live Nation and Manchester United 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 Manchester United 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 Manchester United, you can compare the effects of market volatilities on Live Nation and Manchester United 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 Manchester United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Manchester United.
Diversification Opportunities for Live Nation and Manchester United
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Manchester is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Manchester United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manchester United 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 Manchester United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manchester United has no effect on the direction of Live Nation i.e., Live Nation and Manchester United go up and down completely randomly.
Pair Corralation between Live Nation and Manchester United
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 1.04 times more return on investment than Manchester United. However, Live Nation is 1.04 times more volatile than Manchester United. It trades about 0.4 of its potential returns per unit of risk. Manchester United is currently generating about 0.18 per unit of risk. If you would invest 11,568 in Live Nation Entertainment on August 23, 2024 and sell it today you would earn a total of 2,289 from holding Live Nation Entertainment or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Manchester United
Performance |
| Timeline |
| Live Nation Entertainment |
| Manchester United |
Live Nation and Manchester United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Manchester United
The main advantage of trading using opposite Live Nation and Manchester United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Manchester United 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 Manchester United will offset losses from the drop in Manchester United'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 |
| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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