Correlation Between Live Nation and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both Live Nation and Thunderbird Entertainment 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 Thunderbird Entertainment 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 Thunderbird Entertainment Group, you can compare the effects of market volatilities on Live Nation and Thunderbird Entertainment 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 Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Thunderbird Entertainment.

Diversification Opportunities for Live Nation and Thunderbird Entertainment

0.26

Correlation Coefficient

Live Nation  Thunderbird Entertainment

Modest diversification

The 3 months correlation between Live and Thunderbird is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment 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 Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Live Nation i.e., Live Nation and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Live Nation and Thunderbird Entertainment

Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.64 times more return on investment than Thunderbird Entertainment. However, Live Nation Entertainment is 1.56 times less risky than Thunderbird Entertainment. It trades about -0.03 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.04 per unit of risk. If you would invest  13,101  in Live Nation Entertainment on December 29, 2024 and sell it today you would lose (598.00) from holding Live Nation Entertainment or give up 4.56% of portfolio value over 90 days.

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

Live Nation Entertainment  vs.  Thunderbird Entertainment Grou

Live Nation Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Live Nation is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Thunderbird Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Live Nation and Thunderbird Entertainment

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

The idea behind Live Nation Entertainment and Thunderbird Entertainment Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.