Correlation Between First Ship and Warner Music
Can any of the company-specific risk be diversified away by investing in both First Ship and Warner 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 First Ship and Warner Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Warner Music Group, you can compare the effects of market volatilities on First Ship and Warner 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 First Ship with a short position of Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Warner Music.
Diversification Opportunities for First Ship and Warner Music
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Warner is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group and First Ship 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 First Ship Lease are associated (or correlated) with Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of First Ship i.e., First Ship and Warner Music go up and down completely randomly.
Pair Corralation between First Ship and Warner Music
If you would invest 3,267 in Warner Music Group on September 13, 2024 and sell it today you would earn a total of 4.50 from holding Warner Music Group or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Ship Lease vs. Warner Music Group
Performance |
| Timeline |
| First Ship Lease |
| Warner Music Group |
First Ship and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Warner Music
The main advantage of trading using opposite First Ship and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship position performs unexpectedly, Warner 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 Warner Music will offset losses from the drop in Warner Music's long position.| First Ship vs. Tradeweb Markets | First Ship vs. Simon Property Group | First Ship vs. Newpark Resources | First Ship vs. Fast Retailing Co |
| Warner Music vs. News Corp A | Warner Music vs. Marcus | Warner Music vs. Liberty Media | Warner Music vs. Fox Corp Class |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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