Correlation Between Oesterr Post and Universal Music
Can any of the company-specific risk be diversified away by investing in both Oesterr Post 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 Oesterr Post and Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oesterr Post AG and Universal Music Group, you can compare the effects of market volatilities on Oesterr Post 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 Oesterr Post with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oesterr Post and Universal Music.
Diversification Opportunities for Oesterr Post and Universal Music
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oesterr and Universal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oesterr Post 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 Oesterr Post 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 Oesterr Post 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 Oesterr Post i.e., Oesterr Post and Universal Music go up and down completely randomly.
Pair Corralation between Oesterr Post and Universal Music
Assuming the 90 days trading horizon Oesterr Post AG is expected to under-perform the Universal Music. But the stock apears to be less risky and, when comparing its historical volatility, Oesterr Post AG is 1.6 times less risky than Universal Music. The stock trades about -0.02 of its potential returns per unit of risk. The Universal Music Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,181 in Universal Music Group on August 30, 2024 and sell it today you would earn a total of 97.00 from holding Universal Music Group or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oesterr Post AG vs. Universal Music Group
Performance |
| Timeline |
| Oesterr Post AG |
| Universal Music Group |
Oesterr Post and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oesterr Post and Universal Music
The main advantage of trading using opposite Oesterr Post and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oesterr Post 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.| Oesterr Post vs. Voestalpine AG | Oesterr Post vs. VERBUND AG | Oesterr Post vs. OMV Aktiengesellschaft | Oesterr Post vs. Wienerberger AG |
| Universal Music vs. RATH Aktiengesellschaft | Universal Music vs. AT S Austria | Universal Music vs. BAWAG Group AG | Universal Music vs. Semperit Aktiengesellschaft Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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