Correlation Between Atlanta Braves and Universal Music

Can any of the company-specific risk be diversified away by investing in both Atlanta Braves and Universal 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 Atlanta Braves and Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanta Braves Holdings, and Universal Music Group, you can compare the effects of market volatilities on Atlanta Braves and Universal 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 Atlanta Braves with a short position of Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanta Braves and Universal Music.

Diversification Opportunities for Atlanta Braves and Universal Music

0.14

Correlation Coefficient

Atlanta Braves  Universal Music

Average diversification

The 3 months correlation between Atlanta and Universal is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings, and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group and Atlanta Braves 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 Atlanta Braves Holdings, are associated (or correlated) with Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of Atlanta Braves i.e., Atlanta Braves and Universal Music go up and down completely randomly.

Pair Corralation between Atlanta Braves and Universal Music

Assuming the 90 days horizon Atlanta Braves Holdings, is expected to generate 0.82 times more return on investment than Universal Music. However, Atlanta Braves Holdings, is 1.22 times less risky than Universal Music. It trades about -0.04 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.06 per unit of risk. If you would invest  4,180  in Atlanta Braves Holdings, on September 3, 2024 and sell it today you would lose (126.00) from holding Atlanta Braves Holdings, or give up 3.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atlanta Braves Holdings,  vs.  Universal Music Group

Atlanta Braves Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Atlanta Braves is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Universal Music Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Music Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Universal Music is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlanta Braves and Universal Music

The main advantage of trading using opposite Atlanta Braves and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanta Braves position performs unexpectedly, Universal 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 Universal Music will offset losses from the drop in Universal Music's long position.

The idea behind Atlanta Braves Holdings, and Universal Music Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.