Correlation Between Roku and Live Nation

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

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

Diversification Opportunities for Roku and Live Nation

0.0

Correlation Coefficient

Roku  Live Nation

Pay attention - limited upside

The 3 months correlation between Roku and Live is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc 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 Roku 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 Roku Inc 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 Roku i.e., Roku and Live Nation go up and down completely randomly.

Pair Corralation between Roku and Live Nation

If you would invest  13,091  in Live Nation Entertainment, on October 21, 2024 and sell it today you would earn a total of  3,312  from holding Live Nation Entertainment, or generate 25.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Roku Inc  vs.  Live Nation Entertainment,

Roku Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Roku Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Roku is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Live Nation Entertai

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Live Nation sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roku and Live Nation

The main advantage of trading using opposite Roku and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku 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 Roku Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.