Correlation Between Universal Music and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Universal Music and Siriuspoint 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 Siriuspoint 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 Siriuspoint, you can compare the effects of market volatilities on Universal Music and Siriuspoint 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 Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Siriuspoint.
Diversification Opportunities for Universal Music and Siriuspoint
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and Siriuspoint is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Universal Music i.e., Universal Music and Siriuspoint go up and down completely randomly.
Pair Corralation between Universal Music and Siriuspoint
Assuming the 90 days horizon Universal Music is expected to generate 6.5 times less return on investment than Siriuspoint. In addition to that, Universal Music is 1.12 times more volatile than Siriuspoint. It trades about 0.01 of its total potential returns per unit of risk. Siriuspoint is currently generating about 0.11 per unit of volatility. If you would invest 598.00 in Siriuspoint on September 2, 2024 and sell it today you would earn a total of 944.00 from holding Siriuspoint or generate 157.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Music Group vs. Siriuspoint
Performance |
| Timeline |
| Universal Music Group |
| Siriuspoint |
Universal Music and Siriuspoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Siriuspoint
The main advantage of trading using opposite Universal Music and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Siriuspoint 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 Siriuspoint will offset losses from the drop in Siriuspoint'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, |
| Siriuspoint vs. Maiden Holdings | Siriuspoint vs. Reinsurance Group of | Siriuspoint vs. Oxbridge Re Holdings | Siriuspoint vs. Greenlight Capital Re |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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