Correlation Between Universal Media and Movie Studio
Can any of the company-specific risk be diversified away by investing in both Universal Media and Movie Studio 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 Media and Movie Studio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Media Group and Movie Studio, you can compare the effects of market volatilities on Universal Media and Movie Studio 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 Media with a short position of Movie Studio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Media and Movie Studio.
Diversification Opportunities for Universal Media and Movie Studio
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and Movie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Universal Media Group and Movie Studio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movie Studio and Universal Media 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 Media Group are associated (or correlated) with Movie Studio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movie Studio has no effect on the direction of Universal Media i.e., Universal Media and Movie Studio go up and down completely randomly.
Pair Corralation between Universal Media and Movie Studio
Given the investment horizon of 90 days Universal Media Group is expected to generate 1.19 times more return on investment than Movie Studio. However, Universal Media is 1.19 times more volatile than Movie Studio. It trades about 0.05 of its potential returns per unit of risk. Movie Studio is currently generating about 0.06 per unit of risk. If you would invest 6.60 in Universal Media Group on October 31, 2024 and sell it today you would lose (2.90) from holding Universal Media Group or give up 43.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Universal Media Group vs. Movie Studio
Performance |
| Timeline |
| Universal Media Group |
| Movie Studio |
Universal Media and Movie Studio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Media and Movie Studio
The main advantage of trading using opposite Universal Media and Movie Studio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Media position performs unexpectedly, Movie Studio 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 Movie Studio will offset losses from the drop in Movie Studio's long position.| Universal Media vs. Arhaus Inc | Universal Media vs. Grocery Outlet Holding | Universal Media vs. The Gap, | Universal Media vs. Ecovyst |
| Movie Studio vs. Roku Inc | Movie Studio vs. SNM Gobal Holdings | Movie Studio vs. Seven Arts Entertainment | Movie Studio vs. All For One |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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