Correlation Between World Wrestling and Warner Music
Can any of the company-specific risk be diversified away by investing in both World Wrestling and Warner Music 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 World Wrestling and Warner Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Wrestling Entertainment and Warner Music Group, you can compare the effects of market volatilities on World Wrestling and Warner Music 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 World Wrestling with a short position of Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Wrestling and Warner Music.
Diversification Opportunities for World Wrestling and Warner Music
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between World and Warner is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding World Wrestling Entertainment and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group and World Wrestling 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 World Wrestling Entertainment are associated (or correlated) with Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of World Wrestling i.e., World Wrestling and Warner Music go up and down completely randomly.
Pair Corralation between World Wrestling and Warner Music
Considering the 90-day investment horizon World Wrestling Entertainment is expected to generate 1.17 times more return on investment than Warner Music. However, World Wrestling is 1.17 times more volatile than Warner Music Group. It trades about 0.1 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.01 per unit of risk. If you would invest 7,752 in World Wrestling Entertainment on August 27, 2024 and sell it today you would earn a total of 2,890 from holding World Wrestling Entertainment or generate 37.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
World Wrestling Entertainment vs. Warner Music Group
Performance |
| Timeline |
| World Wrestling Ente |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Warner Music Group |
World Wrestling and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Wrestling and Warner Music
The main advantage of trading using opposite World Wrestling and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Wrestling position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.| World Wrestling vs. Liberty Media | World Wrestling vs. Live Nation Entertainment | World Wrestling vs. Madison Square Garden | World Wrestling vs. Warner Music Group |
| Warner Music vs. News Corp A | Warner Music vs. Marcus | Warner Music vs. Liberty Media | Warner Music vs. Fox Corp Class |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |