Correlation Between UNIVMUSIC GRPADR050 and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both UNIVMUSIC GRPADR050 and Lion Biotechnologies 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 UNIVMUSIC GRPADR050 and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVMUSIC GRPADR050 and Lion Biotechnologies, you can compare the effects of market volatilities on UNIVMUSIC GRPADR050 and Lion Biotechnologies 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 UNIVMUSIC GRPADR050 with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVMUSIC GRPADR050 and Lion Biotechnologies.
Diversification Opportunities for UNIVMUSIC GRPADR050 and Lion Biotechnologies
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIVMUSIC and Lion is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding UNIVMUSIC GRPADR050 and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of UNIVMUSIC GRPADR050 i.e., UNIVMUSIC GRPADR050 and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between UNIVMUSIC GRPADR050 and Lion Biotechnologies
Assuming the 90 days trading horizon UNIVMUSIC GRPADR050 is expected to generate 0.44 times more return on investment than Lion Biotechnologies. However, UNIVMUSIC GRPADR050 is 2.26 times less risky than Lion Biotechnologies. It trades about 0.06 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about -0.25 per unit of risk. If you would invest 1,210 in UNIVMUSIC GRPADR050 on December 30, 2024 and sell it today you would earn a total of 70.00 from holding UNIVMUSIC GRPADR050 or generate 5.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
UNIVMUSIC GRPADR050 vs. Lion Biotechnologies
Performance |
Timeline |
UNIVMUSIC GRPADR050 |
Lion Biotechnologies |
UNIVMUSIC GRPADR050 and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UNIVMUSIC GRPADR050 and Lion Biotechnologies
The main advantage of trading using opposite UNIVMUSIC GRPADR050 and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVMUSIC GRPADR050 position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.UNIVMUSIC GRPADR050 vs. Treasury Wine Estates | UNIVMUSIC GRPADR050 vs. Cardinal Health | UNIVMUSIC GRPADR050 vs. COMM HEALTH SYSTEMS | UNIVMUSIC GRPADR050 vs. CARDINAL HEALTH |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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