Correlation Between Applied Materials and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Prosiebensat 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 Applied Materials and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Prosiebensat 1 Media, you can compare the effects of market volatilities on Applied Materials and Prosiebensat 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 Applied Materials with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Prosiebensat.
Diversification Opportunities for Applied Materials and Prosiebensat
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Applied and Prosiebensat is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and Applied Materials 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 Applied Materials are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Applied Materials i.e., Applied Materials and Prosiebensat go up and down completely randomly.
Pair Corralation between Applied Materials and Prosiebensat
Assuming the 90 days trading horizon Applied Materials is expected to generate 19.04 times less return on investment than Prosiebensat. In addition to that, Applied Materials is 1.59 times more volatile than Prosiebensat 1 Media. It trades about 0.01 of its total potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.2 per unit of volatility. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Applied Materials |
| Prosiebensat 1 Media |
Applied Materials and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Prosiebensat
The main advantage of trading using opposite Applied Materials and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Applied Materials vs. MTI Wireless Edge | Applied Materials vs. AcadeMedia AB | Applied Materials vs. Live Nation Entertainment | Applied Materials vs. Wyndham Hotels Resorts |
| Prosiebensat vs. Zinc Media Group | Prosiebensat vs. XLMedia PLC | Prosiebensat vs. Hollywood Bowl Group | Prosiebensat vs. Universal Display 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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