Correlation Between Hall Of and Live Nation

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

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

Diversification Opportunities for Hall Of and Live Nation

0.03

Correlation Coefficient

Hall Of  Live Nation

Significant diversification

The 3 months correlation between Hall and Live is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hall of Fame 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 Hall Of 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 Hall of Fame 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 Hall Of i.e., Hall Of and Live Nation go up and down completely randomly.

Pair Corralation between Hall Of and Live Nation

Given the investment horizon of 90 days Hall of Fame is expected to generate 5.29 times more return on investment than Live Nation. However, Hall Of is 5.29 times more volatile than Live Nation Entertainment. It trades about 0.05 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.06 per unit of risk. If you would invest  100.00  in Hall of Fame on November 28, 2024 and sell it today you would earn a total of  6.00  from holding Hall of Fame or generate 6.0% return on investment over 90 days.

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

Hall of Fame  vs.  Live Nation Entertainment

Hall of Fame

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hall of Fame are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hall Of showed solid returns over the last few months and may actually be approaching a breakup point.

Live Nation Entertainment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 Hall Of and Live Nation

The main advantage of trading using opposite Hall Of and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hall Of 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 Hall of Fame 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.