Correlation Between Live Nation and Baosheng Media

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

Diversification Opportunities for Live Nation and Baosheng Media

-0.48

Correlation Coefficient

Live Nation  Baosheng Media

Very good diversification

The 3 months correlation between Live and Baosheng is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group 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 Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of Live Nation i.e., Live Nation and Baosheng Media go up and down completely randomly.

Pair Corralation between Live Nation and Baosheng Media

Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.25 times more return on investment than Baosheng Media. However, Live Nation Entertainment is 4.03 times less risky than Baosheng Media. It trades about 0.09 of its potential returns per unit of risk. Baosheng Media Group is currently generating about -0.04 per unit of risk. If you would invest  8,322  in Live Nation Entertainment on August 31, 2024 and sell it today you would earn a total of  5,503  from holding Live Nation Entertainment or generate 66.13% return on investment over 90 days.

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

Live Nation Entertainment  vs.  Baosheng Media Group

Live Nation Entertainment

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Live Nation showed solid returns over the last few months and may actually be approaching a breakup point.

Baosheng Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baosheng Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Live Nation and Baosheng Media

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

The idea behind Live Nation Entertainment and Baosheng Media 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.