Correlation Between NYSE Composite and Live Nation
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Live Nation Entertainment, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Live Nation.
Diversification Opportunities for NYSE Composite and Live Nation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Live is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Live Nation go up and down completely randomly.
Pair Corralation between NYSE Composite and Live Nation
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.68 times less return on investment than Live Nation. But when comparing it to its historical volatility, NYSE Composite is 2.48 times less risky than Live Nation. It trades about 0.12 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 9,767 in Live Nation Entertainment on August 30, 2024 and sell it today you would earn a total of 4,206 from holding Live Nation Entertainment or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Live Nation Entertainment
Performance |
| Timeline |
NYSE Composite and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Live Nation Entertainment
Pair trading matchups for Live Nation
Pair Trading with NYSE Composite and Live Nation
The main advantage of trading using opposite NYSE Composite and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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