Correlation Between Live Nation and Marcus
Can any of the company-specific risk be diversified away by investing in both Live Nation and Marcus 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 Marcus 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 Marcus, you can compare the effects of market volatilities on Live Nation and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Marcus.
Diversification Opportunities for Live Nation and Marcus
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Marcus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Live Nation i.e., Live Nation and Marcus go up and down completely randomly.
Pair Corralation between Live Nation and Marcus
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 1.01 times more return on investment than Marcus. However, Live Nation is 1.01 times more volatile than Marcus. It trades about 0.1 of its potential returns per unit of risk. Marcus is currently generating about 0.05 per unit of risk. If you would invest 6,697 in Live Nation Entertainment on November 1, 2024 and sell it today you would earn a total of 7,709 from holding Live Nation Entertainment or generate 115.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Marcus
Performance |
| Timeline |
| Live Nation Entertainment |
| Marcus |
Live Nation and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Marcus
The main advantage of trading using opposite Live Nation and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' 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 |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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