Correlation Between Universal Music and Sinclair Broadcast
Can any of the company-specific risk be diversified away by investing in both Universal Music and Sinclair Broadcast 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 Sinclair Broadcast 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 Sinclair Broadcast Group, you can compare the effects of market volatilities on Universal Music and Sinclair Broadcast 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 Sinclair Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Sinclair Broadcast.
Diversification Opportunities for Universal Music and Sinclair Broadcast
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Sinclair is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music Group and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast 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 Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of Universal Music i.e., Universal Music and Sinclair Broadcast go up and down completely randomly.
Pair Corralation between Universal Music and Sinclair Broadcast
Assuming the 90 days horizon Universal Music Group is expected to under-perform the Sinclair Broadcast. But the pink sheet apears to be less risky and, when comparing its historical volatility, Universal Music Group is 1.72 times less risky than Sinclair Broadcast. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Sinclair Broadcast Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,331 in Sinclair Broadcast Group on September 9, 2025 and sell it today you would earn a total of 102.00 from holding Sinclair Broadcast Group or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Universal Music Group vs. Sinclair Broadcast Group
Performance |
| Timeline |
| Universal Music Group |
| Sinclair Broadcast |
Universal Music and Sinclair Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Sinclair Broadcast
The main advantage of trading using opposite Universal Music and Sinclair Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music position performs unexpectedly, Sinclair Broadcast 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 Sinclair Broadcast will offset losses from the drop in Sinclair Broadcast's long position.| Universal Music vs. Universal Media Group | Universal Music vs. Bollor SE | Universal Music vs. Reading International | Universal Music vs. Warner Music Group |
| Sinclair Broadcast vs. Shutterstock | Sinclair Broadcast vs. Deluxe | Sinclair Broadcast vs. Cable One | Sinclair Broadcast vs. Getty Images Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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