Correlation Between Nomura Holdings and Live Nation
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings 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 Nomura Holdings and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Live Nation Entertainment, you can compare the effects of market volatilities on Nomura Holdings 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 Nomura Holdings with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Live Nation.
Diversification Opportunities for Nomura Holdings and Live Nation
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nomura and Live is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings i.e., Nomura Holdings and Live Nation go up and down completely randomly.
Pair Corralation between Nomura Holdings and Live Nation
Assuming the 90 days horizon Nomura Holdings is expected to generate 2.57 times less return on investment than Live Nation. In addition to that, Nomura Holdings is 1.02 times more volatile than Live Nation Entertainment. It trades about 0.1 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.26 per unit of volatility. If you would invest 8,778 in Live Nation Entertainment on November 2, 2024 and sell it today you would earn a total of 4,797 from holding Live Nation Entertainment or generate 54.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings vs. Live Nation Entertainment
Performance |
| Timeline |
| Nomura Holdings |
| Live Nation Entertainment |
Nomura Holdings and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Live Nation
The main advantage of trading using opposite Nomura Holdings and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings 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.| Nomura Holdings vs. Air Lease | Nomura Holdings vs. MARKET VECTR RETAIL | Nomura Holdings vs. BJs Wholesale Club | Nomura Holdings vs. COSTCO WHOLESALE CDR |
| Live Nation vs. CHINA TONTINE WINES | Live Nation vs. Choice Hotels International | Live Nation vs. BURLINGTON STORES | Live Nation vs. PICKN PAY STORES |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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