Warner Music Group (WMG)
Warner Music Group Corp.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 31.80% per annum.
- WMG price at the close of September 6, 2024 was $27.60 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 22.37% per annum.
- WMG price at the close of September 6, 2024 was inside the secondary price channel.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of WMG price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: January 12, 2024
End date: September 6, 2024
a = 4.9690
b = -0.0010
s = 0.0305
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -31.80%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0305) – 1
= 12.96%
January 12, 2024 calculations
Top border of price channel:
Exp(Y909)
= Exp(a + b × X909 + 2 × s)
= Exp(a + b × 1,318 + 2 × s)
= Exp(4.9690 + -0.0010 × 1,318 + 2 × 0.0305)
= Exp(3.6482)
= $38.41
Bottom border of price channel:
Exp(Y909)
= Exp(a + b × X909 – 2 × s)
= Exp(a + b × 1,318 – 2 × s)
= Exp(4.9690 + -0.0010 × 1,318 – 2 × 0.0305)
= Exp(3.5264)
= $34.00
September 6, 2024 calculations
Top border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 + 2 × s)
= Exp(a + b × 1,556 + 2 × s)
= Exp(4.9690 + -0.0010 × 1,556 + 2 × 0.0305)
= Exp(3.3987)
= $29.92
Bottom border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 – 2 × s)
= Exp(a + b × 1,556 – 2 × s)
= Exp(4.9690 + -0.0010 × 1,556 – 2 × 0.0305)
= Exp(3.2769)
= $26.49
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 31.80% per annum.
- WMG price at the close of September 6, 2024 was $27.60 and was inside the primary price channel.
Secondary Trend
Start date: August 2, 2024
End date: September 6, 2024
a = 2.4922
b = 0.0006
s = 0.0184
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0006) – 1
= 22.37%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0184) – 1
= 7.65%
August 2, 2024 calculations
Top border of price channel:
Exp(Y1,048)
= Exp(a + b × X1,048 + 2 × s)
= Exp(a + b × 1,521 + 2 × s)
= Exp(2.4922 + 0.0006 × 1,521 + 2 × 0.0184)
= Exp(3.3704)
= $29.09
Bottom border of price channel:
Exp(Y1,048)
= Exp(a + b × X1,048 – 2 × s)
= Exp(a + b × 1,521 – 2 × s)
= Exp(2.4922 + 0.0006 × 1,521 – 2 × 0.0184)
= Exp(3.2967)
= $27.02
September 6, 2024 calculations
Top border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 + 2 × s)
= Exp(a + b × 1,556 + 2 × s)
= Exp(2.4922 + 0.0006 × 1,556 + 2 × 0.0184)
= Exp(3.3898)
= $29.66
Bottom border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 – 2 × s)
= Exp(a + b × 1,556 – 2 × s)
= Exp(2.4922 + 0.0006 × 1,556 – 2 × 0.0184)
= Exp(3.3161)
= $27.55
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 22.37% per annum.
- WMG price at the close of September 6, 2024 was inside the secondary price channel.