Correlation Between Universal Music and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Universal Music and Hochschild Mining 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 Universal Music and Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Music Group and Hochschild Mining plc, you can compare the effects of market volatilities on Universal Music and Hochschild Mining 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 Universal Music with a short position of Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Hochschild Mining.
Diversification Opportunities for Universal Music and Hochschild Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and Hochschild is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Hochschild Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining plc and Universal Music 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 Universal Music Group are associated (or correlated) with Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining plc has no effect on the direction of Universal Music i.e., Universal Music and Hochschild Mining go up and down completely randomly.
Pair Corralation between Universal Music and Hochschild Mining
Assuming the 90 days trading horizon Universal Music Group is expected to generate 0.19 times more return on investment than Hochschild Mining. However, Universal Music Group is 5.37 times less risky than Hochschild Mining. It trades about -0.04 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.09 per unit of risk. If you would invest 2,469 in Universal Music Group on October 25, 2024 and sell it today you would lose (17.00) from holding Universal Music Group or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Music Group vs. Hochschild Mining plc
Performance |
| Timeline |
| Universal Music Group |
| Hochschild Mining plc |
Universal Music and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Hochschild Mining
The main advantage of trading using opposite Universal Music and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Hochschild Mining 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 Hochschild Mining will offset losses from the drop in Hochschild Mining's long position.| Universal Music vs. Toyota Motor Corp | Universal Music vs. SoftBank Group Corp | Universal Music vs. OTP Bank Nyrt | Universal Music vs. ONEOK Inc |
| Hochschild Mining vs. Givaudan SA | Hochschild Mining vs. Antofagasta PLC | Hochschild Mining vs. Ferrexpo PLC | Hochschild Mining vs. Atalaya Mining |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| 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 | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |