Correlation Between Universal Music and FEDEX
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By analyzing existing cross correlation between Universal Music Group and FEDEX P 455, you can compare the effects of market volatilities on Universal Music and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and FEDEX.
Diversification Opportunities for Universal Music and FEDEX
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and FEDEX is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and FEDEX P 455 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 455 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 455 has no effect on the direction of Universal Music i.e., Universal Music and FEDEX go up and down completely randomly.
Pair Corralation between Universal Music and FEDEX
Assuming the 90 days horizon Universal Music Group is expected to under-perform the FEDEX. In addition to that, Universal Music is 2.15 times more volatile than FEDEX P 455. It trades about -0.06 of its total potential returns per unit of risk. FEDEX P 455 is currently generating about -0.01 per unit of volatility. If you would invest 8,305 in FEDEX P 455 on September 1, 2024 and sell it today you would lose (183.00) from holding FEDEX P 455 or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Universal Music Group vs. FEDEX P 455
Performance |
| Timeline |
| Universal Music Group |
| FEDEX P 455 |
Universal Music and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and FEDEX
The main advantage of trading using opposite Universal Music and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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, |
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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