Correlation Between CHEMICAL INDUSTRIES and Live Nation

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Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and Live Nation Entertainment, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and Live Nation.

Diversification Opportunities for CHEMICAL INDUSTRIES and Live Nation

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CHEMICAL and Live is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and Live Nation go up and down completely randomly.

Pair Corralation between CHEMICAL INDUSTRIES and Live Nation

If you would invest  43.00  in CHEMICAL INDUSTRIES on October 12, 2024 and sell it today you would earn a total of  0.00  from holding CHEMICAL INDUSTRIES or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy94.44%
ValuesDaily Returns

CHEMICAL INDUSTRIES  vs.  Live Nation Entertainment

 Performance 
       Timeline  
CHEMICAL INDUSTRIES 

Risk-Adjusted Performance

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Over the last 90 days CHEMICAL INDUSTRIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, CHEMICAL INDUSTRIES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Live Nation Entertainment 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Live Nation reported solid returns over the last few months and may actually be approaching a breakup point.

CHEMICAL INDUSTRIES and Live Nation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CHEMICAL INDUSTRIES and Live Nation

The main advantage of trading using opposite CHEMICAL INDUSTRIES and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES 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.
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The idea behind CHEMICAL INDUSTRIES and Live Nation Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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