Correlation Between UNIVERSAL MUSIC and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL MUSIC and Barrick Gold 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 MUSIC and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVERSAL MUSIC GROUP and Barrick Gold, you can compare the effects of market volatilities on UNIVERSAL MUSIC and Barrick Gold 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 MUSIC with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL MUSIC and Barrick Gold.
Diversification Opportunities for UNIVERSAL MUSIC and Barrick Gold
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNIVERSAL and Barrick is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL MUSIC GROUP and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold and UNIVERSAL MUSIC 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 MUSIC GROUP are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold has no effect on the direction of UNIVERSAL MUSIC i.e., UNIVERSAL MUSIC and Barrick Gold go up and down completely randomly.
Pair Corralation between UNIVERSAL MUSIC and Barrick Gold
Assuming the 90 days horizon UNIVERSAL MUSIC GROUP is expected to generate 0.68 times more return on investment than Barrick Gold. However, UNIVERSAL MUSIC GROUP is 1.48 times less risky than Barrick Gold. It trades about 0.14 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.08 per unit of risk. If you would invest 2,436 in UNIVERSAL MUSIC GROUP on April 23, 2025 and sell it today you would earn a total of 266.00 from holding UNIVERSAL MUSIC GROUP or generate 10.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.48% |
Values | Daily Returns |
UNIVERSAL MUSIC GROUP vs. Barrick Gold
Performance |
Timeline |
UNIVERSAL MUSIC GROUP |
Barrick Gold |
Risk-Adjusted Performance
Modest
Weak | Strong |
UNIVERSAL MUSIC and Barrick Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UNIVERSAL MUSIC and Barrick Gold
The main advantage of trading using opposite UNIVERSAL MUSIC and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL MUSIC position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.UNIVERSAL MUSIC vs. Burlington Stores | UNIVERSAL MUSIC vs. Globex Mining Enterprises | UNIVERSAL MUSIC vs. GOLDQUEST MINING | UNIVERSAL MUSIC vs. AEON STORES |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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