Correlation Between Prosiebensat and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Monks Investment 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 Monks Investment 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 Monks Investment Trust, you can compare the effects of market volatilities on Prosiebensat and Monks Investment 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 Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Monks Investment.
Diversification Opportunities for Prosiebensat and Monks Investment
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosiebensat and Monks is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust 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 Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Prosiebensat i.e., Prosiebensat and Monks Investment go up and down completely randomly.
Pair Corralation between Prosiebensat and Monks Investment
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 3.02 times more return on investment than Monks Investment. However, Prosiebensat is 3.02 times more volatile than Monks Investment Trust. It trades about 0.16 of its potential returns per unit of risk. Monks Investment Trust is currently generating about 0.06 per unit of risk. If you would invest 465.00 in Prosiebensat 1 Media on October 30, 2024 and sell it today you would earn a total of 88.00 from holding Prosiebensat 1 Media or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Monks Investment Trust
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Monks Investment Trust |
Prosiebensat and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Monks Investment
The main advantage of trading using opposite Prosiebensat and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.| Prosiebensat vs. Morgan Advanced Materials | Prosiebensat vs. Geely Automobile Holdings | Prosiebensat vs. Summit Materials Cl | Prosiebensat vs. Liontrust Asset Management |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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