Correlation Between Xiabuxiabu Catering and Warner Music

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Can any of the company-specific risk be diversified away by investing in both Xiabuxiabu Catering 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 Xiabuxiabu Catering and Warner Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiabuxiabu Catering Management and Warner Music Group, you can compare the effects of market volatilities on Xiabuxiabu Catering 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 Xiabuxiabu Catering with a short position of Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiabuxiabu Catering and Warner Music.

Diversification Opportunities for Xiabuxiabu Catering and Warner Music

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Xiabuxiabu and Warner is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xiabuxiabu Catering Management 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 Xiabuxiabu Catering 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 Xiabuxiabu Catering Management 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 Xiabuxiabu Catering i.e., Xiabuxiabu Catering and Warner Music go up and down completely randomly.

Pair Corralation between Xiabuxiabu Catering and Warner Music

Assuming the 90 days horizon Xiabuxiabu Catering Management is expected to under-perform the Warner Music. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xiabuxiabu Catering Management is 1.71 times less risky than Warner Music. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Warner Music Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,075  in Warner Music Group on September 23, 2024 and sell it today you would earn a total of  41.00  from holding Warner Music Group or generate 1.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Xiabuxiabu Catering Management  vs.  Warner Music Group

 Performance 
       Timeline  
Xiabuxiabu Catering 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Warner Music Group 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Warner Music Group are ranked lower than 1 (%) 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Xiabuxiabu Catering and Warner Music Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xiabuxiabu Catering and Warner Music

The main advantage of trading using opposite Xiabuxiabu Catering and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiabuxiabu Catering 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 Xiabuxiabu Catering Management 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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