Correlation Between ELL ENVIRONHLDGS and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELL ENVIRONHLDGS HD 0001 and Prosiebensat 1 Media, you can compare the effects of market volatilities on ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELL ENVIRONHLDGS and Prosiebensat.
Diversification Opportunities for ELL ENVIRONHLDGS and Prosiebensat
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELL and Prosiebensat is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ELL ENVIRONHLDGS HD 0001 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 ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS HD 0001 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 ELL ENVIRONHLDGS i.e., ELL ENVIRONHLDGS and Prosiebensat go up and down completely randomly.
Pair Corralation between ELL ENVIRONHLDGS and Prosiebensat
Assuming the 90 days horizon ELL ENVIRONHLDGS HD 0001 is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, ELL ENVIRONHLDGS HD 0001 is 1.11 times less risky than Prosiebensat. The stock trades about -0.17 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 513.00 in Prosiebensat 1 Media on November 6, 2024 and sell it today you would earn a total of 44.00 from holding Prosiebensat 1 Media or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELL ENVIRONHLDGS HD 0001 vs. Prosiebensat 1 Media
Performance |
| Timeline |
| ELL ENVIRONHLDGS |
| Prosiebensat 1 Media |
ELL ENVIRONHLDGS and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELL ENVIRONHLDGS and Prosiebensat
The main advantage of trading using opposite ELL ENVIRONHLDGS and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELL ENVIRONHLDGS 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.| ELL ENVIRONHLDGS vs. China Eastern Airlines | ELL ENVIRONHLDGS vs. GameStop Corp | ELL ENVIRONHLDGS vs. PENN NATL GAMING | ELL ENVIRONHLDGS vs. OURGAME INTHOLDL 00005 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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