Correlation Between Spotify Technology and Live Nation
Can any of the company-specific risk be diversified away by investing in both Spotify Technology 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 Spotify Technology and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Live Nation Entertainment, you can compare the effects of market volatilities on Spotify Technology 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 Spotify Technology with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Live Nation.
Diversification Opportunities for Spotify Technology and Live Nation
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spotify and Live is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and Spotify Technology 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 Spotify Technology SA 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 Entertainment has no effect on the direction of Spotify Technology i.e., Spotify Technology and Live Nation go up and down completely randomly.
Pair Corralation between Spotify Technology and Live Nation
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.49 times more return on investment than Live Nation. However, Spotify Technology is 1.49 times more volatile than Live Nation Entertainment. It trades about 0.16 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.09 per unit of risk. If you would invest 17,040 in Spotify Technology SA on September 25, 2024 and sell it today you would earn a total of 26,555 from holding Spotify Technology SA or generate 155.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.6% |
Values | Daily Returns |
Spotify Technology SA vs. Live Nation Entertainment
Performance |
Timeline |
Spotify Technology |
Live Nation Entertainment |
Spotify Technology and Live Nation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spotify Technology and Live Nation
The main advantage of trading using opposite Spotify Technology and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology 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.Spotify Technology vs. Fortune Brands Home | Spotify Technology vs. alstria office REIT AG | Spotify Technology vs. American Homes 4 | Spotify Technology vs. AcadeMedia AB |
Live Nation vs. Vitec Software Group | Live Nation vs. Science in Sport | Live Nation vs. Spotify Technology SA | Live Nation vs. Polar Capital Technology |
Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |