Correlation Between Universal Music and Oasmia Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Universal Music and Oasmia Pharmaceutical 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 Oasmia Pharmaceutical 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 Oasmia Pharmaceutical AB, you can compare the effects of market volatilities on Universal Music and Oasmia Pharmaceutical 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 Oasmia Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Oasmia Pharmaceutical.
Diversification Opportunities for Universal Music and Oasmia Pharmaceutical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Universal and Oasmia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Oasmia Pharmaceutical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasmia Pharmaceutical 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 Oasmia Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasmia Pharmaceutical has no effect on the direction of Universal Music i.e., Universal Music and Oasmia Pharmaceutical go up and down completely randomly.
Pair Corralation between Universal Music and Oasmia Pharmaceutical
Assuming the 90 days horizon Universal Music is expected to generate 2.44 times less return on investment than Oasmia Pharmaceutical. But when comparing it to its historical volatility, Universal Music Group is 11.68 times less risky than Oasmia Pharmaceutical. It trades about 0.01 of its potential returns per unit of risk. Oasmia Pharmaceutical AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Oasmia Pharmaceutical AB on August 28, 2024 and sell it today you would lose (14.00) from holding Oasmia Pharmaceutical AB or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.69% |
| Values | Daily Returns |
Universal Music Group vs. Oasmia Pharmaceutical AB
Performance |
| Timeline |
| Universal Music Group |
| Oasmia Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Universal Music and Oasmia Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Oasmia Pharmaceutical
The main advantage of trading using opposite Universal Music and Oasmia Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Oasmia Pharmaceutical 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 Oasmia Pharmaceutical will offset losses from the drop in Oasmia Pharmaceutical's long position.| Universal Music vs. Thunderbird Entertainment Group | Universal Music vs. Warner Music Group | Universal Music vs. Live Nation Entertainment | Universal Music vs. Atlanta Braves Holdings, |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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