Correlation Between Live Nation and PT Bank
Can any of the company-specific risk be diversified away by investing in both Live Nation and PT Bank 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 PT Bank 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 PT Bank Rakyat, you can compare the effects of market volatilities on Live Nation and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and PT Bank.
Diversification Opportunities for Live Nation and PT Bank
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and BYRA is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of Live Nation i.e., Live Nation and PT Bank go up and down completely randomly.
Pair Corralation between Live Nation and PT Bank
Assuming the 90 days horizon Live Nation Entertainment is expected to under-perform the PT Bank. But the stock apears to be less risky and, when comparing its historical volatility, Live Nation Entertainment is 4.14 times less risky than PT Bank. The stock trades about -0.22 of its potential returns per unit of risk. The PT Bank Rakyat is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 25.00 in PT Bank Rakyat on September 24, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Live Nation Entertainment vs. PT Bank Rakyat
Performance |
Timeline |
Live Nation Entertainment |
PT Bank Rakyat |
Live Nation and PT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Live Nation and PT Bank
The main advantage of trading using opposite Live Nation and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.Live Nation vs. CTS Eventim AG | Live Nation vs. Fuji Media Holdings | Live Nation vs. Cinemark Holdings | Live Nation vs. Rai Way SpA |
PT Bank vs. Ubisoft Entertainment SA | PT Bank vs. Live Nation Entertainment | PT Bank vs. Perseus Mining Limited | PT Bank vs. PT Global Mediacom |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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