Correlation Between HeadsUp Entertainment and Universal Media

Can any of the company-specific risk be diversified away by investing in both HeadsUp Entertainment and Universal Media 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 HeadsUp Entertainment and Universal Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HeadsUp Entertainment International and Universal Media Group, you can compare the effects of market volatilities on HeadsUp Entertainment and Universal Media 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 HeadsUp Entertainment with a short position of Universal Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeadsUp Entertainment and Universal Media.

Diversification Opportunities for HeadsUp Entertainment and Universal Media

0.76

Correlation Coefficient

HeadsUp Entertainment  Universal Media

Poor diversification

The 3 months correlation between HeadsUp and Universal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding HeadsUp Entertainment Internat and Universal Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Media Group and HeadsUp Entertainment 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 HeadsUp Entertainment International are associated (or correlated) with Universal Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Media Group has no effect on the direction of HeadsUp Entertainment i.e., HeadsUp Entertainment and Universal Media go up and down completely randomly.

Pair Corralation between HeadsUp Entertainment and Universal Media

Given the investment horizon of 90 days HeadsUp Entertainment International is expected to under-perform the Universal Media. But the pink sheet apears to be less risky and, when comparing its historical volatility, HeadsUp Entertainment International is 2.33 times less risky than Universal Media. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Universal Media Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6.10  in Universal Media Group on October 7, 2024 and sell it today you would lose (4.00) from holding Universal Media Group or give up 65.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

HeadsUp Entertainment Internat  vs.  Universal Media Group

HeadsUp Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HeadsUp Entertainment International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Universal Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak technical and fundamental indicators, Universal Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HeadsUp Entertainment and Universal Media

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

The idea behind HeadsUp Entertainment International and Universal Media 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 Transaction History module to view history of all your transactions and understand their impact on performance.