Correlation Between Live Nation and Manchester United

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

Diversification Opportunities for Live Nation and Manchester United

-0.73

Correlation Coefficient

Live Nation  Manchester United

Pay attention - limited upside

The 3 months correlation between Live and Manchester is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and Manchester United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manchester United 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 Manchester United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manchester United has no effect on the direction of Live Nation i.e., Live Nation and Manchester United go up and down completely randomly.

Pair Corralation between Live Nation and Manchester United

Considering the 90-day investment horizon Live Nation Entertainment is expected to under-perform the Manchester United. In addition to that, Live Nation is 1.95 times more volatile than Manchester United. It trades about -0.14 of its total potential returns per unit of risk. Manchester United is currently generating about 0.17 per unit of volatility. If you would invest  1,479  in Manchester United on February 6, 2024 and sell it today you would earn a total of  70.00  from holding Manchester United or generate 4.73% return on investment over 90 days.

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

Live Nation Entertainment  vs.  Manchester United

Live Nation Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Live Nation may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Manchester United

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manchester United 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 comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Live Nation and Manchester United

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

The idea behind Live Nation Entertainment and Manchester United 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.