Correlation Between Atlanta Braves and Live Nation

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

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

Diversification Opportunities for Atlanta Braves and Live Nation

0.32

Correlation Coefficient

Atlanta Braves  Live Nation

Weak diversification

The 3 months correlation between Atlanta and Live is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings, 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 Atlanta Braves 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 Atlanta Braves Holdings, 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 Atlanta Braves i.e., Atlanta Braves and Live Nation go up and down completely randomly.

Pair Corralation between Atlanta Braves and Live Nation

Assuming the 90 days horizon Atlanta Braves Holdings, is expected to generate 0.56 times more return on investment than Live Nation. However, Atlanta Braves Holdings, is 1.8 times less risky than Live Nation. It trades about 0.09 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.03 per unit of risk. If you would invest  3,782  in Atlanta Braves Holdings, on December 28, 2024 and sell it today you would earn a total of  223.00  from holding Atlanta Braves Holdings, or generate 5.9% return on investment over 90 days.

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

Atlanta Braves Holdings,  vs.  Live Nation Entertainment

Atlanta Braves Holdings,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanta Braves Holdings, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Atlanta Braves is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

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 fairly stable basic indicators, Live Nation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Atlanta Braves and Live Nation

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

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.