Correlation Between BAWAG Group and Universal Music
Can any of the company-specific risk be diversified away by investing in both BAWAG Group and Universal Music 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 BAWAG Group and Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAWAG Group AG and Universal Music Group, you can compare the effects of market volatilities on BAWAG Group and Universal Music 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 BAWAG Group with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAWAG Group and Universal Music.
Diversification Opportunities for BAWAG Group and Universal Music
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BAWAG and Universal is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BAWAG Group AG and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group and BAWAG Group 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 BAWAG Group AG are associated (or correlated) with Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of BAWAG Group i.e., BAWAG Group and Universal Music go up and down completely randomly.
Pair Corralation between BAWAG Group and Universal Music
Assuming the 90 days horizon BAWAG Group AG is expected to generate 0.68 times more return on investment than Universal Music. However, BAWAG Group AG is 1.46 times less risky than Universal Music. It trades about 0.11 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.06 per unit of risk. If you would invest 6,050 in BAWAG Group AG on September 1, 2024 and sell it today you would earn a total of 1,450 from holding BAWAG Group AG or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
BAWAG Group AG vs. Universal Music Group
Performance |
| Timeline |
| BAWAG Group AG |
| Universal Music Group |
BAWAG Group and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAWAG Group and Universal Music
The main advantage of trading using opposite BAWAG Group and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAWAG Group position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. Addiko Bank AG | BAWAG Group vs. Wiener Privatbank SE | BAWAG Group vs. RATH Aktiengesellschaft |
| Universal Music vs. Unilever PLC | Universal Music vs. Anheuser Busch InBev SANV | Universal Music vs. The Este Lauder | Universal Music vs. JD Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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