Correlation Between ICC Holdings and Universal Music
Can any of the company-specific risk be diversified away by investing in both ICC Holdings 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 ICC Holdings and Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and Universal Music Group, you can compare the effects of market volatilities on ICC Holdings 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 ICC Holdings with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Universal Music.
Diversification Opportunities for ICC Holdings and Universal Music
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICC and Universal is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings 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 ICC Holdings 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 ICC Holdings 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 ICC Holdings i.e., ICC Holdings and Universal Music go up and down completely randomly.
Pair Corralation between ICC Holdings and Universal Music
Given the investment horizon of 90 days ICC Holdings is expected to generate 22.53 times more return on investment than Universal Music. However, ICC Holdings is 22.53 times more volatile than Universal Music Group. It trades about 0.05 of its potential returns per unit of risk. Universal Music Group is currently generating about 0.02 per unit of risk. If you would invest 1,573 in ICC Holdings on August 30, 2024 and sell it today you would earn a total of 722.00 from holding ICC Holdings or generate 45.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.68% |
| Values | Daily Returns |
ICC Holdings vs. Universal Music Group
Performance |
| Timeline |
| ICC Holdings |
| Universal Music Group |
ICC Holdings and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and Universal Music
The main advantage of trading using opposite ICC Holdings and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings 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.| ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title | ICC Holdings vs. Essent Group |
| Universal Music vs. Thunderbird Entertainment Group | Universal Music vs. Warner Music Group | Universal Music vs. Live Nation Entertainment | Universal Music vs. Atlanta Braves Holdings, |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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