Correlation Between Universal Media and Viemed Healthcare

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

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

Diversification Opportunities for Universal Media and Viemed Healthcare

0.33

Correlation Coefficient

Universal Media  Viemed Healthcare

Weak diversification

The 3 months correlation between Universal and Viemed is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Universal Media Group and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and Universal Media 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 Media Group are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Universal Media i.e., Universal Media and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Universal Media and Viemed Healthcare

Given the investment horizon of 90 days Universal Media Group is expected to under-perform the Viemed Healthcare. In addition to that, Universal Media is 3.77 times more volatile than Viemed Healthcare. It trades about -0.36 of its total potential returns per unit of risk. Viemed Healthcare is currently generating about 0.13 per unit of volatility. If you would invest  817.00  in Viemed Healthcare on October 27, 2024 and sell it today you would earn a total of  31.00  from holding Viemed Healthcare or generate 3.79% return on investment over 90 days.

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

Universal Media Group  vs.  Viemed Healthcare

Universal Media Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Media Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Universal Media reported solid returns over the last few months and may actually be approaching a breakup point.

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Viemed Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Universal Media and Viemed Healthcare

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

The idea behind Universal Media Group and Viemed Healthcare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.