Correlation Between UNIVERSAL MUSIC and Scientific Games
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL MUSIC and Scientific Games 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 Scientific Games 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 Scientific Games, you can compare the effects of market volatilities on UNIVERSAL MUSIC and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL MUSIC and Scientific Games.
Diversification Opportunities for UNIVERSAL MUSIC and Scientific Games
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIVERSAL and Scientific is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL MUSIC GROUP and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of UNIVERSAL MUSIC i.e., UNIVERSAL MUSIC and Scientific Games go up and down completely randomly.
Pair Corralation between UNIVERSAL MUSIC and Scientific Games
Assuming the 90 days horizon UNIVERSAL MUSIC GROUP is expected to generate 0.57 times more return on investment than Scientific Games. However, UNIVERSAL MUSIC GROUP is 1.74 times less risky than Scientific Games. It trades about 0.08 of its potential returns per unit of risk. Scientific Games is currently generating about -0.05 per unit of risk. If you would invest 2,351 in UNIVERSAL MUSIC GROUP on November 2, 2024 and sell it today you would earn a total of 255.00 from holding UNIVERSAL MUSIC GROUP or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVERSAL MUSIC GROUP vs. Scientific Games
Performance |
| Timeline |
| UNIVERSAL MUSIC GROUP |
| Scientific Games |
UNIVERSAL MUSIC and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVERSAL MUSIC and Scientific Games
The main advantage of trading using opposite UNIVERSAL MUSIC and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL MUSIC position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| UNIVERSAL MUSIC vs. TOWNSQUARE MEDIA INC | UNIVERSAL MUSIC vs. Seven West Media | UNIVERSAL MUSIC vs. STMICROELECTRONICS | UNIVERSAL MUSIC vs. Meiko Electronics Co |
| Scientific Games vs. MGIC INVESTMENT | Scientific Games vs. CVW CLEANTECH INC | Scientific Games vs. Clean Energy Fuels | Scientific Games vs. Guangdong Investment Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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