Correlation Between Warner Music and Hologic
Can any of the company-specific risk be diversified away by investing in both Warner Music and Hologic 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 Hologic 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 Hologic, you can compare the effects of market volatilities on Warner Music and Hologic 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 Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Music and Hologic.
Diversification Opportunities for Warner Music and Hologic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Warner and Hologic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Warner Music Group and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic 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 Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Warner Music i.e., Warner Music and Hologic go up and down completely randomly.
Pair Corralation between Warner Music and Hologic
Assuming the 90 days horizon Warner Music Group is expected to generate 1.41 times more return on investment than Hologic. However, Warner Music is 1.41 times more volatile than Hologic. It trades about 0.08 of its potential returns per unit of risk. Hologic is currently generating about -0.03 per unit of risk. If you would invest 2,727 in Warner Music Group on September 25, 2024 and sell it today you would earn a total of 218.00 from holding Warner Music Group or generate 7.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Warner Music Group vs. Hologic
Performance |
Timeline |
Warner Music Group |
Hologic |
Warner Music and Hologic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Warner Music and Hologic
The main advantage of trading using opposite Warner Music and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Music position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.Warner Music vs. SENECA FOODS A | Warner Music vs. EIDESVIK OFFSHORE NK | Warner Music vs. THAI BEVERAGE | Warner Music vs. Ebro Foods SA |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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