Correlation Between Live Nation and SNM Gobal
Can any of the company-specific risk be diversified away by investing in both Live Nation and SNM Gobal 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 SNM Gobal 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 SNM Gobal Holdings, you can compare the effects of market volatilities on Live Nation and SNM Gobal 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 SNM Gobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and SNM Gobal.
Diversification Opportunities for Live Nation and SNM Gobal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and SNM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and SNM Gobal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNM Gobal Holdings 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 SNM Gobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNM Gobal Holdings has no effect on the direction of Live Nation i.e., Live Nation and SNM Gobal go up and down completely randomly.
Pair Corralation between Live Nation and SNM Gobal
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.17 times more return on investment than SNM Gobal. However, Live Nation Entertainment is 5.87 times less risky than SNM Gobal. It trades about 0.21 of its potential returns per unit of risk. SNM Gobal Holdings is currently generating about -0.09 per unit of risk. If you would invest 9,435 in Live Nation Entertainment on September 1, 2024 and sell it today you would earn a total of 4,390 from holding Live Nation Entertainment or generate 46.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. SNM Gobal Holdings
Performance |
| Timeline |
| Live Nation Entertainment |
| SNM Gobal Holdings |
Live Nation and SNM Gobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and SNM Gobal
The main advantage of trading using opposite Live Nation and SNM Gobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, SNM Gobal 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 SNM Gobal will offset losses from the drop in SNM Gobal'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 |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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