Correlation Between Warner Music and MHP Hotel
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By analyzing existing cross correlation between Warner Music Group and MHP Hotel AG, you can compare the effects of market volatilities on Warner Music and MHP Hotel 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 MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Music and MHP Hotel.
Diversification Opportunities for Warner Music and MHP Hotel
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Warner and MHP is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Warner Music Group and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG 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 MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of Warner Music i.e., Warner Music and MHP Hotel go up and down completely randomly.
Pair Corralation between Warner Music and MHP Hotel
Assuming the 90 days horizon Warner Music Group is expected to generate 0.84 times more return on investment than MHP Hotel. However, Warner Music Group is 1.18 times less risky than MHP Hotel. It trades about 0.05 of its potential returns per unit of risk. MHP Hotel AG is currently generating about 0.0 per unit of risk. If you would invest 2,214 in Warner Music Group on August 31, 2024 and sell it today you would earn a total of 809.00 from holding Warner Music Group or generate 36.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Music Group vs. MHP Hotel AG
Performance |
| Timeline |
| Warner Music Group |
| MHP Hotel AG |
Warner Music and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Music and MHP Hotel
The main advantage of trading using opposite Warner Music and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Music position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.| Warner Music vs. Dairy Farm International | Warner Music vs. Daito Trust Construction | Warner Music vs. AUST AGRICULTURAL | Warner Music vs. JAPAN AIRLINES |
| MHP Hotel vs. LODESTAR MIN | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Superior Plus Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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