Correlation Between Prosiebensat and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Arrow Electronics 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 Prosiebensat and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosiebensat 1 Media and Arrow Electronics, you can compare the effects of market volatilities on Prosiebensat and Arrow Electronics 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 Prosiebensat with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Arrow Electronics.
Diversification Opportunities for Prosiebensat and Arrow Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prosiebensat and Arrow is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Prosiebensat 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 Prosiebensat 1 Media are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Prosiebensat i.e., Prosiebensat and Arrow Electronics go up and down completely randomly.
Pair Corralation between Prosiebensat and Arrow Electronics
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 1.45 times more return on investment than Arrow Electronics. However, Prosiebensat is 1.45 times more volatile than Arrow Electronics. It trades about 0.2 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.05 per unit of risk. If you would invest 514.00 in Prosiebensat 1 Media on November 7, 2024 and sell it today you would earn a total of 47.00 from holding Prosiebensat 1 Media or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Arrow Electronics
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Arrow Electronics |
Prosiebensat and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Arrow Electronics
The main advantage of trading using opposite Prosiebensat and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Prosiebensat vs. Zinc Media Group | Prosiebensat vs. XLMedia PLC | Prosiebensat vs. Hollywood Bowl Group | Prosiebensat vs. Universal Display Corp |
| Arrow Electronics vs. Lowland Investment Co | Arrow Electronics vs. Science in Sport | Arrow Electronics vs. Monks Investment Trust | Arrow Electronics vs. Livermore Investments Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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