Correlation Between G5 Entertainment and Live Nation

Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G5 Entertainment AB and Live Nation Entertainment, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Live Nation.

Diversification Opportunities for G5 Entertainment and Live Nation

0.48

Correlation Coefficient

G5 Entertainment  Live Nation

Very weak diversification

The 3 months correlation between 0QUS and Live is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and Live Nation go up and down completely randomly.

Pair Corralation between G5 Entertainment and Live Nation

Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.23 times more return on investment than Live Nation. However, G5 Entertainment is 1.23 times more volatile than Live Nation Entertainment. It trades about 0.1 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.02 per unit of risk. If you would invest  10,940  in G5 Entertainment AB on December 30, 2024 and sell it today you would earn a total of  1,660  from holding G5 Entertainment AB or generate 15.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

G5 Entertainment AB  vs.  Live Nation Entertainment

G5 Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Live Nation Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Live Nation is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with G5 Entertainment and Live Nation

The main advantage of trading using opposite G5 Entertainment and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.

The idea behind G5 Entertainment AB 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.