Correlation Between UNIVMUSIC GRPADR050 and Progressive Corp
Can any of the company-specific risk be diversified away by investing in both UNIVMUSIC GRPADR050 and Progressive 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 UNIVMUSIC GRPADR050 and Progressive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVMUSIC GRPADR050 and Progressive Corp, you can compare the effects of market volatilities on UNIVMUSIC GRPADR050 and Progressive 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 UNIVMUSIC GRPADR050 with a short position of Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVMUSIC GRPADR050 and Progressive Corp.
Diversification Opportunities for UNIVMUSIC GRPADR050 and Progressive Corp
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIVMUSIC and Progressive is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding UNIVMUSIC GRPADR050 and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 are associated (or correlated) with Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of UNIVMUSIC GRPADR050 i.e., UNIVMUSIC GRPADR050 and Progressive Corp go up and down completely randomly.
Pair Corralation between UNIVMUSIC GRPADR050 and Progressive Corp
Assuming the 90 days trading horizon UNIVMUSIC GRPADR050 is expected to generate 0.55 times more return on investment than Progressive Corp. However, UNIVMUSIC GRPADR050 is 1.82 times less risky than Progressive Corp. It trades about 0.08 of its potential returns per unit of risk. Progressive Corp is currently generating about 0.02 per unit of risk. If you would invest 1,157 in UNIVMUSIC GRPADR050 on November 2, 2024 and sell it today you would earn a total of 133.00 from holding UNIVMUSIC GRPADR050 or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
UNIVMUSIC GRPADR050 vs. Progressive Corp
Performance |
| Timeline |
| UNIVMUSIC GRPADR050 |
| Progressive Corp |
UNIVMUSIC GRPADR050 and Progressive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVMUSIC GRPADR050 and Progressive Corp
The main advantage of trading using opposite UNIVMUSIC GRPADR050 and Progressive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVMUSIC GRPADR050 position performs unexpectedly, Progressive 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 Progressive Corp will offset losses from the drop in Progressive Corp's long position.| UNIVMUSIC GRPADR050 vs. PURE FOODS TASMANIA | UNIVMUSIC GRPADR050 vs. Methode Electronics | UNIVMUSIC GRPADR050 vs. THAI BEVERAGE | UNIVMUSIC GRPADR050 vs. STORE ELECTRONIC |
| Progressive Corp vs. DIVERSIFIED ROYALTY | Progressive Corp vs. CDL INVESTMENT | Progressive Corp vs. Treasury Wine Estates | Progressive Corp vs. HK Electric Investments |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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