Correlation Between Umicore SA and Live Nation
Can any of the company-specific risk be diversified away by investing in both Umicore SA 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 Umicore SA and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Umicore SA and Live Nation Entertainment, you can compare the effects of market volatilities on Umicore SA 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 Umicore SA with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Umicore SA and Live Nation.
Diversification Opportunities for Umicore SA and Live Nation
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Umicore and Live is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Umicore SA 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 Umicore SA 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 Umicore SA 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 Umicore SA i.e., Umicore SA and Live Nation go up and down completely randomly.
Pair Corralation between Umicore SA and Live Nation
Assuming the 90 days trading horizon Umicore SA is expected to generate 1.35 times more return on investment than Live Nation. However, Umicore SA is 1.35 times more volatile than Live Nation Entertainment. It trades about 0.09 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.04 per unit of risk. If you would invest 1,067 in Umicore SA on September 13, 2024 and sell it today you would earn a total of 42.00 from holding Umicore SA or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Umicore SA vs. Live Nation Entertainment
Performance |
| Timeline |
| Umicore SA |
| Live Nation Entertainment |
Umicore SA and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Umicore SA and Live Nation
The main advantage of trading using opposite Umicore SA and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Umicore SA 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.| Umicore SA vs. CHINA TELECOM H | Umicore SA vs. Sims Metal Management | Umicore SA vs. CeoTronics AG | Umicore SA vs. Gamma Communications plc |
| Live Nation vs. Toho Co | Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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