Correlation Between Marcus and Live Nation
Can any of the company-specific risk be diversified away by investing in both Marcus and Live Nation 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 Marcus and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcus and Live Nation Entertainment, you can compare the effects of market volatilities on Marcus and Live Nation 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 Marcus with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Live Nation.
Diversification Opportunities for Marcus and Live Nation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marcus and Live is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and Marcus 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 Marcus are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of Marcus i.e., Marcus and Live Nation go up and down completely randomly.
Pair Corralation between Marcus and Live Nation
Considering the 90-day investment horizon Marcus is expected to generate 1.5 times more return on investment than Live Nation. However, Marcus is 1.5 times more volatile than Live Nation Entertainment. It trades about 0.42 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.4 per unit of risk. If you would invest 1,647 in Marcus on August 23, 2024 and sell it today you would earn a total of 535.00 from holding Marcus or generate 32.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marcus vs. Live Nation Entertainment
Performance |
| Timeline |
| Marcus |
| Live Nation Entertainment |
Marcus and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcus and Live Nation
The main advantage of trading using opposite Marcus and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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