Correlation Between Universal Music and Moneta Money

Can any of the company-specific risk be diversified away by investing in both Universal Music and Moneta Money 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 Moneta Money 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 Moneta Money Bank, you can compare the effects of market volatilities on Universal Music and Moneta Money 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 Moneta Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Moneta Money.

Diversification Opportunities for Universal Music and Moneta Money

0.0

Correlation Coefficient

Universal Music  Moneta Money

Pay attention - limited upside

The 3 months correlation between Universal and Moneta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Moneta Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneta Money Bank 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 Moneta Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneta Money Bank has no effect on the direction of Universal Music i.e., Universal Music and Moneta Money go up and down completely randomly.

Pair Corralation between Universal Music and Moneta Money

If you would invest  2,469  in Universal Music Group on December 24, 2024 and sell it today you would earn a total of  78.00  from holding Universal Music Group or generate 3.16% return on investment over 90 days.

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

Universal Music Group  vs.  Moneta Money Bank

Universal Music Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Music Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Universal Music is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Moneta Money Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moneta Money Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Moneta Money is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Universal Music and Moneta Money

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

The idea behind Universal Music Group and Moneta Money Bank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.