Correlation Between ARDAGH METAL and Live Nation

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

By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Live Nation Entertainment, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Live Nation.

Diversification Opportunities for ARDAGH METAL and Live Nation

-0.26

Correlation Coefficient

ARDAGH METAL  Live Nation

Very good diversification

The 3 months correlation between ARDAGH and Live is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Live Nation go up and down completely randomly.

Pair Corralation between ARDAGH METAL and Live Nation

Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Live Nation. In addition to that, ARDAGH METAL is 1.93 times more volatile than Live Nation Entertainment. It trades about -0.34 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.17 per unit of volatility. If you would invest  12,925  in Live Nation Entertainment on October 8, 2024 and sell it today you would lose (395.00) from holding Live Nation Entertainment or give up 3.06% of portfolio value over 90 days.

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

ARDAGH METAL PACDL 0001  vs.  Live Nation Entertainment

ARDAGH METAL PACDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Live Nation Entertainment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 15 (%) 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.

Pair Trading with ARDAGH METAL and Live Nation

The main advantage of trading using opposite ARDAGH METAL and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.