Correlation Between Eagle Materials and Live Nation
Can any of the company-specific risk be diversified away by investing in both Eagle Materials 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 Eagle Materials and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and Live Nation Entertainment, you can compare the effects of market volatilities on Eagle Materials 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 Eagle Materials with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Live Nation.
Diversification Opportunities for Eagle Materials and Live Nation
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Live is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials 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 Eagle Materials 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 Eagle Materials 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 Eagle Materials i.e., Eagle Materials and Live Nation go up and down completely randomly.
Pair Corralation between Eagle Materials and Live Nation
Assuming the 90 days horizon Eagle Materials is expected to under-perform the Live Nation. In addition to that, Eagle Materials is 1.19 times more volatile than Live Nation Entertainment. It trades about -0.3 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.05 per unit of volatility. If you would invest 13,065 in Live Nation Entertainment on December 1, 2024 and sell it today you would earn a total of 420.00 from holding Live Nation Entertainment or generate 3.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eagle Materials vs. Live Nation Entertainment
Performance |
Timeline |
Eagle Materials |
Live Nation Entertainment |
Eagle Materials and Live Nation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eagle Materials and Live Nation
The main advantage of trading using opposite Eagle Materials and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials 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.Eagle Materials vs. Sterling Construction | Eagle Materials vs. GigaMedia | Eagle Materials vs. Nufarm Limited | Eagle Materials vs. Titan Machinery |
Live Nation vs. CEOTRONICS | Live Nation vs. GURU ORGANIC ENERGY | Live Nation vs. Cleanaway Waste Management | Live Nation vs. AGF Management Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Stocks Directory Find actively traded stocks across global markets |