Correlation Between Universal Music and Accsys Technologies
Can any of the company-specific risk be diversified away by investing in both Universal Music and Accsys Technologies 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 Music and Accsys Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Music Group and Accsys Technologies, you can compare the effects of market volatilities on Universal Music and Accsys Technologies 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 Music with a short position of Accsys Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Accsys Technologies.
Diversification Opportunities for Universal Music and Accsys Technologies
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Accsys is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Accsys Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accsys Technologies and Universal Music 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 Music Group are associated (or correlated) with Accsys Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accsys Technologies has no effect on the direction of Universal Music i.e., Universal Music and Accsys Technologies go up and down completely randomly.
Pair Corralation between Universal Music and Accsys Technologies
Assuming the 90 days trading horizon Universal Music Group is expected to under-perform the Accsys Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Universal Music Group is 2.02 times less risky than Accsys Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Accsys Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Accsys Technologies on August 30, 2024 and sell it today you would lose (2.00) from holding Accsys Technologies or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Music Group vs. Accsys Technologies
Performance |
| Timeline |
| Universal Music Group |
| Accsys Technologies |
Universal Music and Accsys Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Accsys Technologies
The main advantage of trading using opposite Universal Music and Accsys Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Accsys Technologies 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 Accsys Technologies will offset losses from the drop in Accsys Technologies' long position.| Universal Music vs. Vivendi SA | Universal Music vs. Prosus NV | Universal Music vs. Pershing Square Holdings | Universal Music vs. Adyen NV |
| Accsys Technologies vs. Avantium Holding BV | Accsys Technologies vs. AMG Advanced Metallurgical | Accsys Technologies vs. Pharming Group NV | Accsys Technologies vs. CM NV |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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