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

-0.4

Correlation Coefficient

UNIVERSAL MUSIC  Barrick Gold

Very good diversification

The 3 months correlation between UNIVERSAL and Barrick is -0.4. 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 is expected to generate 1.03 times less return on investment than Barrick Gold. But when comparing it to its historical volatility, UNIVERSAL MUSIC GROUP is 1.5 times less risky than Barrick Gold. It trades about 0.13 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,661  in Barrick Gold on April 25, 2025 and sell it today you would earn a total of  139.00  from holding Barrick Gold or generate 8.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.3%
Values	Daily Returns

UNIVERSAL MUSIC GROUP  vs.  Barrick Gold

UNIVERSAL MUSIC GROUP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVERSAL MUSIC GROUP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, UNIVERSAL MUSIC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Barrick Gold

Risk-Adjusted Performance

Modest

Over the last 90 days Barrick Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Barrick Gold may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

The idea behind UNIVERSAL MUSIC GROUP and Barrick Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.