Correlation Between SEEK and UNIVMUSIC GRPADR050

Can any of the company-specific risk be diversified away by investing in both SEEK and UNIVMUSIC GRPADR050 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 SEEK and UNIVMUSIC GRPADR050 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SEEK Limited and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on SEEK and UNIVMUSIC GRPADR050 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 SEEK with a short position of UNIVMUSIC GRPADR050. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEEK and UNIVMUSIC GRPADR050.

Diversification Opportunities for SEEK and UNIVMUSIC GRPADR050

-0.28

Correlation Coefficient

SEEK  UNIVMUSIC GRPADR050

Very good diversification

The 3 months correlation between SEEK and UNIVMUSIC is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SEEK Limited and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR050 and SEEK 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 SEEK Limited are associated (or correlated) with UNIVMUSIC GRPADR050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR050 has no effect on the direction of SEEK i.e., SEEK and UNIVMUSIC GRPADR050 go up and down completely randomly.

Pair Corralation between SEEK and UNIVMUSIC GRPADR050

Assuming the 90 days horizon SEEK Limited is expected to generate 0.81 times more return on investment than UNIVMUSIC GRPADR050. However, SEEK Limited is 1.23 times less risky than UNIVMUSIC GRPADR050. It trades about 0.11 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about -0.08 per unit of risk. If you would invest  1,250  in SEEK Limited on May 19, 2025 and sell it today you would earn a total of  130.00  from holding SEEK Limited or generate 10.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SEEK Limited  vs.  UNIVMUSIC GRPADR050

SEEK Limited

Risk-Adjusted Performance

Fair

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

UNIVMUSIC GRPADR050

Risk-Adjusted Performance

Weakest

Over the last 90 days UNIVMUSIC GRPADR050 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SEEK and UNIVMUSIC GRPADR050

The main advantage of trading using opposite SEEK and UNIVMUSIC GRPADR050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEEK position performs unexpectedly, UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 will offset losses from the drop in UNIVMUSIC GRPADR050's long position.

The idea behind SEEK Limited and UNIVMUSIC GRPADR050 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.