Correlation Between Live Nation and Technos SA

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

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

Diversification Opportunities for Live Nation and Technos SA

0.02

Correlation Coefficient

Live Nation  Technos SA

Significant diversification

The 3 months correlation between Live and Technos is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment, and Technos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technos SA and Live Nation 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 Live Nation Entertainment, are associated (or correlated) with Technos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technos SA has no effect on the direction of Live Nation i.e., Live Nation and Technos SA go up and down completely randomly.

Pair Corralation between Live Nation and Technos SA

Assuming the 90 days trading horizon Live Nation Entertainment, is expected to under-perform the Technos SA. But the stock apears to be less risky and, when comparing its historical volatility, Live Nation Entertainment, is 1.93 times less risky than Technos SA. The stock trades about -0.01 of its potential returns per unit of risk. The Technos SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  539.00  in Technos SA on October 25, 2024 and sell it today you would earn a total of  29.00  from holding Technos SA or generate 5.38% return on investment over 90 days.

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

Live Nation Entertainment,  vs.  Technos SA

Live Nation Entertai

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment, are ranked lower than 15 (%) 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.

Technos SA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Technos SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Technos SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Live Nation and Technos SA

The main advantage of trading using opposite Live Nation and Technos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, Technos SA 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 Technos SA will offset losses from the drop in Technos SA's long position.

The idea behind Live Nation Entertainment, and Technos SA 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 Stocks Directory module to find actively traded stocks across global markets.