Correlation Between Prosafe SE and FirstGroup Plc
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and FirstGroup Plc 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 Prosafe SE and FirstGroup Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and FirstGroup plc, you can compare the effects of market volatilities on Prosafe SE and FirstGroup Plc 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 Prosafe SE with a short position of FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and FirstGroup Plc.
Diversification Opportunities for Prosafe SE and FirstGroup Plc
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prosafe and FirstGroup is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc and Prosafe SE 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 Prosafe SE are associated (or correlated) with FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of Prosafe SE i.e., Prosafe SE and FirstGroup Plc go up and down completely randomly.
Pair Corralation between Prosafe SE and FirstGroup Plc
Assuming the 90 days horizon Prosafe SE is expected to generate 12.65 times more return on investment than FirstGroup Plc. However, Prosafe SE is 12.65 times more volatile than FirstGroup plc. It trades about 0.12 of its potential returns per unit of risk. FirstGroup plc is currently generating about 0.08 per unit of risk. If you would invest 54.00 in Prosafe SE on November 3, 2024 and sell it today you would earn a total of 16.00 from holding Prosafe SE or generate 29.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. FirstGroup plc
Performance |
| Timeline |
| Prosafe SE |
| FirstGroup plc |
Prosafe SE and FirstGroup Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and FirstGroup Plc
The main advantage of trading using opposite Prosafe SE and FirstGroup Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, FirstGroup Plc 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 FirstGroup Plc will offset losses from the drop in FirstGroup Plc's long position.| Prosafe SE vs. BlueScope Steel Limited | Prosafe SE vs. UNITED RENTALS | Prosafe SE vs. Mount Gibson Iron | Prosafe SE vs. KOBE STEEL LTD |
| FirstGroup Plc vs. Take Two Interactive Software | FirstGroup Plc vs. Broadridge Financial Solutions | FirstGroup Plc vs. Gold Road Resources | FirstGroup Plc vs. Unity Software |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |