Correlation Between Southland Holdings and Universal Music
Can any of the company-specific risk be diversified away by investing in both Southland 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 Southland 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 Southland Holdings and Universal Music Group, you can compare the effects of market volatilities on Southland 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 Southland Holdings with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Universal Music.
Diversification Opportunities for Southland Holdings and Universal Music
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Southland and Universal is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Southland 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 Southland 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 Southland 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 Southland Holdings i.e., Southland Holdings and Universal Music go up and down completely randomly.
Pair Corralation between Southland Holdings and Universal Music
Given the investment horizon of 90 days Southland Holdings is expected to under-perform the Universal Music. In addition to that, Southland Holdings is 1.74 times more volatile than Universal Music Group. It trades about -0.13 of its total potential returns per unit of risk. Universal Music Group is currently generating about 0.23 per unit of volatility. If you would invest 1,248 in Universal Music Group on November 3, 2024 and sell it today you would earn a total of 114.00 from holding Universal Music Group or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Universal Music Group
Performance |
| Timeline |
| Southland Holdings |
| Universal Music Group |
Southland Holdings and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and Universal Music
The main advantage of trading using opposite Southland Holdings and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland 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.| Southland Holdings vs. Fluent Inc | Southland Holdings vs. Jacobs Solutions | Southland Holdings vs. 51Talk Online Education | Southland Holdings vs. Highway Holdings Limited |
| Universal Music vs. Universal Media Group | Universal Music vs. Bollor SE | Universal Music vs. Reading International | Universal Music vs. Warner Music Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |