Correlation Between UNIVERSAL MUSIC and Altia Oyj
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL MUSIC and Altia Oyj 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 Altia Oyj 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 Altia Oyj, you can compare the effects of market volatilities on UNIVERSAL MUSIC and Altia Oyj 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 Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL MUSIC and Altia Oyj.
Diversification Opportunities for UNIVERSAL MUSIC and Altia Oyj
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UNIVERSAL and Altia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL MUSIC GROUP and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj 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 Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of UNIVERSAL MUSIC i.e., UNIVERSAL MUSIC and Altia Oyj go up and down completely randomly.
Pair Corralation between UNIVERSAL MUSIC and Altia Oyj
Assuming the 90 days horizon UNIVERSAL MUSIC GROUP is expected to generate 1.19 times more return on investment than Altia Oyj. However, UNIVERSAL MUSIC is 1.19 times more volatile than Altia Oyj. It trades about -0.04 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.18 per unit of risk. If you would invest 2,804 in UNIVERSAL MUSIC GROUP on September 14, 2024 and sell it today you would lose (397.00) from holding UNIVERSAL MUSIC GROUP or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVERSAL MUSIC GROUP vs. Altia Oyj
Performance |
| Timeline |
| UNIVERSAL MUSIC GROUP |
| Altia Oyj |
UNIVERSAL MUSIC and Altia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVERSAL MUSIC and Altia Oyj
The main advantage of trading using opposite UNIVERSAL MUSIC and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL MUSIC position performs unexpectedly, Altia Oyj 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.| UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc |
| Altia Oyj vs. Food Life Companies | Altia Oyj vs. OURGAME INTHOLDL 00005 | Altia Oyj vs. Associated British Foods | Altia Oyj vs. PT Indofood Sukses |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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