Correlation Between Mobileye Global and Live Nation

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

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

Diversification Opportunities for Mobileye Global and Live Nation

0.89

Correlation Coefficient

Mobileye Global  Live Nation

Very poor diversification

The 3 months correlation between Mobileye and Live is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class 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 Mobileye Global 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 Mobileye Global Class 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 Mobileye Global i.e., Mobileye Global and Live Nation go up and down completely randomly.

Pair Corralation between Mobileye Global and Live Nation

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 2.11 times more return on investment than Live Nation. However, Mobileye Global is 2.11 times more volatile than Live Nation Entertainment,. It trades about 0.22 of its potential returns per unit of risk. Live Nation Entertainment, is currently generating about 0.16 per unit of risk. If you would invest  1,544  in Mobileye Global Class on October 7, 2024 and sell it today you would earn a total of  626.00  from holding Mobileye Global Class or generate 40.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	92.68%
Values	Daily Returns

Mobileye Global Class  vs.  Live Nation Entertainment,

Mobileye Global Class

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.

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 Mobileye Global and Live Nation

The main advantage of trading using opposite Mobileye Global and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global 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 Mobileye Global Class 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.