Correlation Between Live Nation and Zinc Media

Can any of the company-specific risk be diversified away by investing in both Live Nation and Zinc Media 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 Live Nation and Zinc Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Live Nation Entertainment and Zinc Media Group, you can compare the effects of market volatilities on Live Nation and Zinc Media 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 Live Nation with a short position of Zinc Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Zinc Media.

Diversification Opportunities for Live Nation and Zinc Media

-0.83

Correlation Coefficient

Live Nation  Zinc Media

Pay attention - limited upside

The 3 months correlation between Live and Zinc is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc Media Group and Live Nation 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 Live Nation Entertainment are associated (or correlated) with Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of Live Nation i.e., Live Nation and Zinc Media go up and down completely randomly.

Pair Corralation between Live Nation and Zinc Media

Assuming the 90 days trading horizon Live Nation Entertainment is expected to generate 0.55 times more return on investment than Zinc Media. However, Live Nation Entertainment is 1.81 times less risky than Zinc Media. It trades about 0.05 of its potential returns per unit of risk. Zinc Media Group is currently generating about -0.01 per unit of risk. If you would invest  12,550  in Live Nation Entertainment on October 7, 2024 and sell it today you would earn a total of  384.00  from holding Live Nation Entertainment or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

Live Nation Entertainment  vs.  Zinc Media Group

Live Nation Entertainment

Risk-Adjusted Performance

12 of 100

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. In spite of comparatively uncertain basic indicators, Live Nation unveiled solid returns over the last few months and may actually be approaching a breakup point.

Zinc Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zinc Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Live Nation and Zinc Media

The main advantage of trading using opposite Live Nation and Zinc Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Zinc Media 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 Zinc Media will offset losses from the drop in Zinc Media's long position.

The idea behind Live Nation Entertainment and Zinc Media Group 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.