Correlation Between Universal Entertainment and Cross Country
Can any of the company-specific risk be diversified away by investing in both Universal Entertainment and Cross Country 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 Universal Entertainment and Cross Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Entertainment and Cross Country Healthcare, you can compare the effects of market volatilities on Universal Entertainment and Cross Country 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 Universal Entertainment with a short position of Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Entertainment and Cross Country.
Diversification Opportunities for Universal Entertainment and Cross Country
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and Cross is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Universal Entertainment and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare and Universal Entertainment 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 Universal Entertainment are associated (or correlated) with Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Universal Entertainment i.e., Universal Entertainment and Cross Country go up and down completely randomly.
Pair Corralation between Universal Entertainment and Cross Country
Assuming the 90 days trading horizon Universal Entertainment is expected to under-perform the Cross Country. But the stock apears to be less risky and, when comparing its historical volatility, Universal Entertainment is 2.1 times less risky than Cross Country. The stock trades about -0.08 of its potential returns per unit of risk. The Cross Country Healthcare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Cross Country Healthcare on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Cross Country Healthcare or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Entertainment vs. Cross Country Healthcare
Performance |
| Timeline |
| Universal Entertainment |
| Cross Country Healthcare |
Universal Entertainment and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Entertainment and Cross Country
The main advantage of trading using opposite Universal Entertainment and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Entertainment position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc |
| Cross Country vs. Gamma Communications plc | Cross Country vs. Ribbon Communications | Cross Country vs. Universal Display | Cross Country vs. Entravision Communications |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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