Correlation Between Warner Music and JSL SA
Can any of the company-specific risk be diversified away by investing in both Warner Music and JSL SA 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 Warner Music and JSL SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Music Group and JSL SA, you can compare the effects of market volatilities on Warner Music and JSL SA 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 Warner Music with a short position of JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Music and JSL SA.
Diversification Opportunities for Warner Music and JSL SA
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Warner and JSL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Warner Music Group and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA and Warner 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 Warner Music Group are associated (or correlated) with JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of Warner Music i.e., Warner Music and JSL SA go up and down completely randomly.
Pair Corralation between Warner Music and JSL SA
Assuming the 90 days trading horizon Warner Music Group is expected to generate 0.72 times more return on investment than JSL SA. However, Warner Music Group is 1.39 times less risky than JSL SA. It trades about 0.08 of its potential returns per unit of risk. JSL SA is currently generating about -0.09 per unit of risk. If you would invest 3,950 in Warner Music Group on August 24, 2024 and sell it today you would earn a total of 785.00 from holding Warner Music Group or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Music Group vs. JSL SA
Performance |
| Timeline |
| Warner Music Group |
| JSL SA |
Warner Music and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Music and JSL SA
The main advantage of trading using opposite Warner Music and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Music position performs unexpectedly, JSL SA 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 JSL SA will offset losses from the drop in JSL SA's long position.| Warner Music vs. Charter Communications | Warner Music vs. Bemobi Mobile Tech | Warner Music vs. BTG Pactual Logstica | Warner Music vs. Plano Plano Desenvolvimento |
| JSL SA vs. SVB Financial Group | JSL SA vs. Warner Music Group | JSL SA vs. Align Technology | JSL SA vs. Bread Financial 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |