Correlation Between Patria Investments and Live Nation
Can any of the company-specific risk be diversified away by investing in both Patria Investments 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 Patria Investments and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Investments Limited and Live Nation Entertainment,, you can compare the effects of market volatilities on Patria Investments 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 Patria Investments with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Investments and Live Nation.
Diversification Opportunities for Patria Investments and Live Nation
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Patria and Live is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments Limited and Live Nation Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertai and Patria Investments 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 Patria Investments Limited 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 Entertai has no effect on the direction of Patria Investments i.e., Patria Investments and Live Nation go up and down completely randomly.
Pair Corralation between Patria Investments and Live Nation
Assuming the 90 days trading horizon Patria Investments Limited is expected to under-perform the Live Nation. But the stock apears to be less risky and, when comparing its historical volatility, Patria Investments Limited is 1.03 times less risky than Live Nation. The stock trades about -0.22 of its potential returns per unit of risk. The Live Nation Entertainment, is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 16,704 in Live Nation Entertainment, on October 16, 2024 and sell it today you would lose (934.00) from holding Live Nation Entertainment, or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patria Investments Limited vs. Live Nation Entertainment,
Performance |
| Timeline |
| Patria Investments |
| Live Nation Entertai |
Patria Investments and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Investments and Live Nation
The main advantage of trading using opposite Patria Investments and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Investments 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.| Patria Investments vs. Taiwan Semiconductor Manufacturing | Patria Investments vs. Apple Inc | Patria Investments vs. Alibaba Group Holding | Patria Investments vs. Banco Santander Chile |
| Live Nation vs. Charter Communications | Live Nation vs. Warner Music Group | Live Nation vs. Bemobi Mobile Tech |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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