Correlation Between Kohls and Warner Music
Can any of the company-specific risk be diversified away by investing in both Kohls 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 Kohls and Warner Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kohls and Warner Music Group, you can compare the effects of market volatilities on Kohls 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 Kohls with a short position of Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls and Warner Music.
Diversification Opportunities for Kohls and Warner Music
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kohls and Warner is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kohls 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 Kohls 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 Kohls 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 Kohls i.e., Kohls and Warner Music go up and down completely randomly.
Pair Corralation between Kohls and Warner Music
Assuming the 90 days trading horizon Kohls is expected to under-perform the Warner Music. In addition to that, Kohls is 2.63 times more volatile than Warner Music Group. It trades about -0.07 of its total potential returns per unit of risk. Warner Music Group is currently generating about 0.02 per unit of volatility. If you would invest 3,042 in Warner Music Group on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Warner Music Group or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kohls vs. Warner Music Group
Performance |
| Timeline |
| Kohls |
| Warner Music Group |
Kohls and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kohls and Warner Music
The main advantage of trading using opposite Kohls and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kohls 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.| Kohls vs. PKSHA TECHNOLOGY INC | Kohls vs. Hyatt Hotels | Kohls vs. INTERCONT HOTELS | Kohls vs. Wyndham Hotels Resorts |
| Warner Music vs. The Walt Disney | Warner Music vs. Charter Communications | Warner Music vs. Superior Plus Corp | Warner Music vs. SIVERS SEMICONDUCTORS AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |