Correlation Between Live Nation and News Corp

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

Diversification Opportunities for Live Nation and News Corp

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Live Nation and News Corp is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and News Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp A 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp A has no effect on the direction of Live Nation i.e., Live Nation and News Corp go up and down completely randomly.

Pair Corralation between Live Nation and News Corp

Considering the 90-day investment horizon Live Nation Entertainment is expected to under-perform the News Corp. In addition to that, Live Nation is 1.27 times more volatile than News Corp A. It trades about -0.05 of its total potential returns per unit of risk. News Corp A is currently generating about 0.27 per unit of volatility. If you would invest  1,647  in News Corp A on September 3, 2022 and sell it today you would earn a total of  247.50  from holding News Corp A or generate 15.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Live Nation Entertainment  vs.  News Corp A

 Performance (%) 
       Timeline  
Live Nation Entertainment 
Live Nation Performance
0 of 100
Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2023. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Live Nation Price Channel

News Corp A 
News Corp Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in News Corp A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, News Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

News Corp Price Channel

Live Nation and News Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Live Nation and News Corp

The main advantage of trading using opposite Live Nation and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, News Corp 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 News Corp will offset losses from the drop in News Corp's long position.
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The idea behind Live Nation Entertainment and News Corp A 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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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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