Correlation Between Cleen Energy and Universal Music
Can any of the company-specific risk be diversified away by investing in both Cleen Energy 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 Cleen Energy and Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleen Energy AG and Universal Music Group, you can compare the effects of market volatilities on Cleen Energy 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 Cleen Energy with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleen Energy and Universal Music.
Diversification Opportunities for Cleen Energy and Universal Music
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cleen and Universal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cleen Energy 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 Cleen Energy 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 Cleen Energy 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 Cleen Energy i.e., Cleen Energy and Universal Music go up and down completely randomly.
Pair Corralation between Cleen Energy and Universal Music
Assuming the 90 days trading horizon Cleen Energy AG is expected to generate 7.16 times more return on investment than Universal Music. However, Cleen Energy is 7.16 times more volatile than Universal Music Group. It trades about 0.01 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.04 per unit of risk. If you would invest 50.00 in Cleen Energy AG on September 3, 2024 and sell it today you would lose (10.00) from holding Cleen Energy AG or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleen Energy AG vs. Universal Music Group
Performance |
| Timeline |
| Cleen Energy AG |
| Universal Music Group |
Cleen Energy and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleen Energy and Universal Music
The main advantage of trading using opposite Cleen Energy and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleen Energy 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.| Cleen Energy vs. Universal Music Group | Cleen Energy vs. Vienna Insurance Group | Cleen Energy vs. Raiffeisen Bank International | Cleen Energy vs. Erste Group Bank |
| Universal Music vs. SBM Offshore NV | Universal Music vs. Raiffeisen Bank International | Universal Music vs. BKS Bank AG | Universal Music vs. Vienna Insurance Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |