Correlation Between Universal Music and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Universal Music and Comtech Telecommunicatio 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 Comtech Telecommunicatio 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 Comtech Telecommunications Corp, you can compare the effects of market volatilities on Universal Music and Comtech Telecommunicatio 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 Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Comtech Telecommunicatio.
Diversification Opportunities for Universal Music and Comtech Telecommunicatio
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and Comtech is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio 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 Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Universal Music i.e., Universal Music and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Universal Music and Comtech Telecommunicatio
Assuming the 90 days horizon Universal Music Group is expected to under-perform the Comtech Telecommunicatio. But the pink sheet apears to be less risky and, when comparing its historical volatility, Universal Music Group is 2.5 times less risky than Comtech Telecommunicatio. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Comtech Telecommunications Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 201.00 in Comtech Telecommunications Corp on August 30, 2025 and sell it today you would earn a total of 102.00 from holding Comtech Telecommunications Corp or generate 50.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Universal Music Group vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Universal Music Group |
| Comtech Telecommunicatio |
Universal Music and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Comtech Telecommunicatio
The main advantage of trading using opposite Universal Music and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.| Universal Music vs. X FAB Silicon Foundries | Universal Music vs. NorthPoint Communications Group | Universal Music vs. United Internet AG | Universal Music vs. HPQ Silicon Resources |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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