Correlation Between UNIVERSAL MUSIC and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both UNIVERSAL MUSIC and Graham Holdings 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 Graham Holdings 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 Graham Holdings Co, you can compare the effects of market volatilities on UNIVERSAL MUSIC and Graham Holdings 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL MUSIC and Graham Holdings.
Diversification Opportunities for UNIVERSAL MUSIC and Graham Holdings
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIVERSAL and Graham is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL MUSIC GROUP and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of UNIVERSAL MUSIC i.e., UNIVERSAL MUSIC and Graham Holdings go up and down completely randomly.
Pair Corralation between UNIVERSAL MUSIC and Graham Holdings
Assuming the 90 days horizon UNIVERSAL MUSIC GROUP is expected to under-perform the Graham Holdings. But the stock apears to be less risky and, when comparing its historical volatility, UNIVERSAL MUSIC GROUP is 1.21 times less risky than Graham Holdings. The stock trades about -0.11 of its potential returns per unit of risk. The Graham Holdings Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 78,843 in Graham Holdings Co on July 15, 2025 and sell it today you would earn a total of 3,657 from holding Graham Holdings Co or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVERSAL MUSIC GROUP vs. Graham Holdings Co
Performance |
| Timeline |
| UNIVERSAL MUSIC GROUP |
| Graham Holdings |
UNIVERSAL MUSIC and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVERSAL MUSIC and Graham Holdings
The main advantage of trading using opposite UNIVERSAL MUSIC and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL MUSIC position performs unexpectedly, Graham Holdings 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 Graham Holdings will offset losses from the drop in Graham Holdings' long position.| UNIVERSAL MUSIC vs. IMAGIN MEDICAL INC | UNIVERSAL MUSIC vs. Mitsubishi Gas Chemical | UNIVERSAL MUSIC vs. Compugroup Medical SE | UNIVERSAL MUSIC vs. KINGBOARD CHEMICAL |
| Graham Holdings vs. VIRGIN WINES UK | Graham Holdings vs. The Yokohama Rubber | Graham Holdings vs. BROADSTNET LEADL 00025 | Graham Holdings vs. NAKED WINES PLC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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