Correlation Between PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ 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 PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and PROSIEBENSAT1 MEDIADR4, you can compare the effects of market volatilities on PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ 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 PPHE HOTEL with a short position of PROSIEBENSAT1 MEDIADR4/. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/.
Diversification Opportunities for PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PPHE and PROSIEBENSAT1 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with PROSIEBENSAT1 MEDIADR4/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSIEBENSAT1 MEDIADR4/ has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.
Pair Corralation between PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the PROSIEBENSAT1 MEDIADR4/. In addition to that, PPHE HOTEL is 1.02 times more volatile than PROSIEBENSAT1 MEDIADR4. It trades about -0.19 of its total potential returns per unit of risk. PROSIEBENSAT1 MEDIADR4 is currently generating about 0.18 per unit of volatility. If you would invest 125.00 in PROSIEBENSAT1 MEDIADR4 on November 5, 2024 and sell it today you would earn a total of 10.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. PROSIEBENSAT1 MEDIADR4
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| PROSIEBENSAT1 MEDIADR4/ |
PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/
The main advantage of trading using opposite PPHE HOTEL and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ will offset losses from the drop in PROSIEBENSAT1 MEDIADR4/'s long position.| PPHE HOTEL vs. ARISTOCRAT LEISURE | PPHE HOTEL vs. Playtech plc | PPHE HOTEL vs. KIMBALL ELECTRONICS | PPHE HOTEL vs. Marie Brizard Wine |
| PROSIEBENSAT1 MEDIADR4/ vs. Warner Music Group | PROSIEBENSAT1 MEDIADR4/ vs. PEPTONIC MEDICAL | PROSIEBENSAT1 MEDIADR4/ vs. CHRYSALIS INVESTMENTS LTD | PROSIEBENSAT1 MEDIADR4/ vs. UNIVMUSIC GRPADR050 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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