Correlation Between Atlanta Braves and Warner Music

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

Diversification Opportunities for Atlanta Braves and Warner Music

0.79

Correlation Coefficient

Atlanta Braves  Warner Music

Poor diversification

The 3 months correlation between Atlanta and Warner is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings, and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of Atlanta Braves i.e., Atlanta Braves and Warner Music go up and down completely randomly.

Pair Corralation between Atlanta Braves and Warner Music

Assuming the 90 days horizon Atlanta Braves Holdings, is expected to generate 0.63 times more return on investment than Warner Music. However, Atlanta Braves Holdings, is 1.59 times less risky than Warner Music. It trades about 0.18 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.05 per unit of risk. If you would invest  4,030  in Atlanta Braves Holdings, on December 29, 2024 and sell it today you would earn a total of  465.00  from holding Atlanta Braves Holdings, or generate 11.54% return on investment over 90 days.

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

Atlanta Braves Holdings,  vs.  Warner Music Group

Atlanta Braves Holdings,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanta Braves Holdings, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atlanta Braves may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Warner Music Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Music Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Warner Music is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Atlanta Braves and Warner Music

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

The idea behind Atlanta Braves Holdings, and Warner 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.