Correlation Between Ping An and Live Nation
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Live Nation Entertainment, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Live Nation.
Diversification Opportunities for Ping An and Live Nation
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and Live is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance 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 Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Live Nation go up and down completely randomly.
Pair Corralation between Ping An and Live Nation
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 2.59 times more return on investment than Live Nation. However, Ping An is 2.59 times more volatile than Live Nation Entertainment. It trades about 0.17 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.35 per unit of risk. If you would invest 335.00 in Ping An Insurance on August 30, 2024 and sell it today you would earn a total of 205.00 from holding Ping An Insurance or generate 61.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Live Nation Entertainment
Performance |
| Timeline |
| Ping An Insurance |
| Live Nation Entertainment |
Ping An and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Live Nation
The main advantage of trading using opposite Ping An and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. Southwest Airlines Co | Ping An vs. Selective Insurance Group | Ping An vs. MOVIE GAMES SA | Ping An vs. Reinsurance Group of |
| Live Nation vs. PLAYTECH | Live Nation vs. Playa Hotels Resorts | Live Nation vs. Sixt Leasing SE | Live Nation vs. Madison Square Garden |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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