Correlation Between Ita Unibanco and Live Nation

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

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

Diversification Opportunities for Ita Unibanco and Live Nation

-0.21

Correlation Coefficient

Ita Unibanco  Live Nation

Very good diversification

The 3 months correlation between Ita and Live is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ita Unibanco Holding and Live Nation Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertai and Ita Unibanco 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 Ita Unibanco Holding 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 Entertai has no effect on the direction of Ita Unibanco i.e., Ita Unibanco and Live Nation go up and down completely randomly.

Pair Corralation between Ita Unibanco and Live Nation

Assuming the 90 days trading horizon Ita Unibanco Holding is expected to under-perform the Live Nation. But the preferred stock apears to be less risky and, when comparing its historical volatility, Ita Unibanco Holding is 1.44 times less risky than Live Nation. The preferred stock trades about -0.19 of its potential returns per unit of risk. The Live Nation Entertainment, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  12,178  in Live Nation Entertainment, on October 7, 2024 and sell it today you would earn a total of  3,842  from holding Live Nation Entertainment, or generate 31.55% return on investment over 90 days.

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

Ita Unibanco Holding  vs.  Live Nation Entertainment,

Ita Unibanco Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ita Unibanco Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Live Nation Entertai

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Live Nation sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ita Unibanco and Live Nation

The main advantage of trading using opposite Ita Unibanco and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ita Unibanco 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 Ita Unibanco Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.