Correlation Between Universal Music and AMG Advanced

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Universal Music and AMG Advanced 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 Music and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Music Group and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Universal Music and AMG Advanced 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 Music with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and AMG Advanced.

Diversification Opportunities for Universal Music and AMG Advanced

UniversalAMGDiversified AwayUniversalAMGDiversified Away100%
-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Universal and AMG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Universal 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 Universal Music Group are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Universal Music i.e., Universal Music and AMG Advanced go up and down completely randomly.

Pair Corralation between Universal Music and AMG Advanced

Assuming the 90 days trading horizon Universal Music Group is expected to generate 0.63 times more return on investment than AMG Advanced. However, Universal Music Group is 1.6 times less risky than AMG Advanced. It trades about 0.11 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.11 per unit of risk. If you would invest  2,237  in Universal Music Group on September 21, 2024 and sell it today you would earn a total of  200.00  from holding Universal Music Group or generate 8.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Universal Music Group  vs.  AMG Advanced Metallurgical

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-505
JavaScript chart by amCharts 3.21.15UMG AMG
       Timeline  
Universal Music Group 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Universal Music Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Universal Music may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2222.52323.52424.525
AMG Advanced Metallu 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec13.51414.51515.51616.51717.5

Universal Music and AMG Advanced Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.97-2.99-2.02-1.04-0.06620.951.962.983.995.01 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15UMG AMG
       Returns  

Pair Trading with Universal Music and AMG Advanced

The main advantage of trading using opposite Universal Music and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.
The idea behind Universal Music Group and AMG Advanced Metallurgical 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.
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings