Correlation Between Prosiebensat and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Prosiebensat and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Polar Capital.
Diversification Opportunities for Prosiebensat and Polar Capital
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prosiebensat and Polar is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Prosiebensat i.e., Prosiebensat and Polar Capital go up and down completely randomly.
Pair Corralation between Prosiebensat and Polar Capital
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the Polar Capital. In addition to that, Prosiebensat is 2.0 times more volatile than Polar Capital Technology. It trades about -0.02 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.1 per unit of volatility. If you would invest 19,900 in Polar Capital Technology on November 2, 2024 and sell it today you would earn a total of 16,500 from holding Polar Capital Technology or generate 82.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Polar Capital Technology
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Polar Capital Technology |
Prosiebensat and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Polar Capital
The main advantage of trading using opposite Prosiebensat and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Prosiebensat vs. Raymond James Financial | Prosiebensat vs. Orient Telecoms | Prosiebensat vs. Telecom Italia SpA | Prosiebensat vs. Gamma Communications PLC |
| Polar Capital vs. Endeavour Mining Corp | Polar Capital vs. Jacquet Metal Service | Polar Capital vs. Tyson Foods Cl | Polar Capital vs. Tatton Asset Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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