Correlation Between Manchester United and Madison Square
Can any of the company-specific risk be diversified away by investing in both Manchester United and Madison Square 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 Manchester United and Madison Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manchester United and Madison Square Garden, you can compare the effects of market volatilities on Manchester United and Madison Square 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 Manchester United with a short position of Madison Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manchester United and Madison Square.
Diversification Opportunities for Manchester United and Madison Square
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manchester and Madison is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Manchester United and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden and Manchester United 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 Manchester United are associated (or correlated) with Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Manchester United i.e., Manchester United and Madison Square go up and down completely randomly.
Pair Corralation between Manchester United and Madison Square
Given the investment horizon of 90 days Manchester United is expected to under-perform the Madison Square. In addition to that, Manchester United is 1.59 times more volatile than Madison Square Garden. It trades about -0.24 of its total potential returns per unit of risk. Madison Square Garden is currently generating about -0.12 per unit of volatility. If you would invest 22,568 in Madison Square Garden on November 1, 2024 and sell it today you would lose (508.00) from holding Madison Square Garden or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manchester United vs. Madison Square Garden
Performance |
| Timeline |
| Manchester United |
| Madison Square Garden |
Manchester United and Madison Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manchester United and Madison Square
The main advantage of trading using opposite Manchester United and Madison Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manchester United position performs unexpectedly, Madison Square 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 Madison Square will offset losses from the drop in Madison Square's long position.| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty Media |
| Madison Square vs. Atlanta Braves Holdings, | Madison Square vs. Liberty Media | Madison Square vs. Liberty Media | Madison Square 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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