Correlation Between Prosiebensat and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Prosiebensat and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Hollywood Bowl.
Diversification Opportunities for Prosiebensat and Hollywood Bowl
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosiebensat and Hollywood is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Prosiebensat i.e., Prosiebensat and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Prosiebensat and Hollywood Bowl
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 1.4 times more return on investment than Hollywood Bowl. However, Prosiebensat is 1.4 times more volatile than Hollywood Bowl Group. It trades about 0.16 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.12 per unit of risk. If you would invest 505.00 in Prosiebensat 1 Media on October 28, 2024 and sell it today you would earn a total of 32.00 from holding Prosiebensat 1 Media or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Hollywood Bowl Group
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Hollywood Bowl Group |
Prosiebensat and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Hollywood Bowl
The main advantage of trading using opposite Prosiebensat and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Prosiebensat vs. Discover Financial Services | Prosiebensat vs. Roebuck Food Group | Prosiebensat vs. Commerzbank AG | Prosiebensat vs. Axfood AB |
| Hollywood Bowl vs. Aptitude Software Group | Hollywood Bowl vs. Sealed Air Corp | Hollywood Bowl vs. Automatic Data Processing | Hollywood Bowl vs. Teradata Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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