Correlation Between Live Nation and PARAGON GROUP

Can any of the company-specific risk be diversified away by investing in both Live Nation and PARAGON GROUP 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 PARAGON GROUP 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 PARAGON GROUP, you can compare the effects of market volatilities on Live Nation and PARAGON GROUP 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 PARAGON GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and PARAGON GROUP.

Diversification Opportunities for Live Nation and PARAGON GROUP

0.61

Correlation Coefficient

Live Nation  PARAGON GROUP

Poor diversification

The 3 months correlation between Live and PARAGON is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and PARAGON GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARAGON 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 PARAGON GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARAGON GROUP has no effect on the direction of Live Nation i.e., Live Nation and PARAGON GROUP go up and down completely randomly.

Pair Corralation between Live Nation and PARAGON GROUP

Assuming the 90 days horizon Live Nation Entertainment is expected to under-perform the PARAGON GROUP. In addition to that, Live Nation is 1.03 times more volatile than PARAGON GROUP. It trades about -0.12 of its total potential returns per unit of risk. PARAGON GROUP is currently generating about 0.06 per unit of volatility. If you would invest  855.00  in PARAGON GROUP on December 21, 2024 and sell it today you would earn a total of  50.00  from holding PARAGON GROUP or generate 5.85% return on investment over 90 days.

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

Live Nation Entertainment  vs.  PARAGON GROUP

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. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PARAGON GROUP

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PARAGON GROUP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, PARAGON GROUP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Live Nation and PARAGON GROUP

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

The idea behind Live Nation Entertainment and PARAGON 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.