Correlation Between CNVISION MEDIA and Live Nation

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

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

Diversification Opportunities for CNVISION MEDIA and Live Nation

-0.16

Correlation Coefficient

CNVISION MEDIA  Live Nation

Good diversification

The 3 months correlation between CNVISION and Live is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and Live Nation go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and Live Nation

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 46.53 times less return on investment than Live Nation. In addition to that, CNVISION MEDIA is 1.58 times more volatile than Live Nation Entertainment. It trades about 0.0 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.07 per unit of volatility. If you would invest  6,849  in Live Nation Entertainment on October 5, 2024 and sell it today you would earn a total of  5,706  from holding Live Nation Entertainment or generate 83.31% return on investment over 90 days.

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

CNVISION MEDIA  vs.  Live Nation Entertainment

CNVISION MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNVISION MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Live Nation Entertainment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. 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 CNVISION MEDIA and Live Nation

The main advantage of trading using opposite CNVISION MEDIA and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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 CNVISION MEDIA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.