Correlation Between Alfa Financial and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Prosiebensat 1 Media, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Prosiebensat.
Diversification Opportunities for Alfa Financial and Prosiebensat
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alfa and Prosiebensat is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Prosiebensat go up and down completely randomly.
Pair Corralation between Alfa Financial and Prosiebensat
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.67 times more return on investment than Prosiebensat. However, Alfa Financial Software is 1.5 times less risky than Prosiebensat. It trades about 0.11 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.0 per unit of risk. If you would invest 161.00 in Alfa Financial Software on September 14, 2024 and sell it today you would earn a total of 111.00 from holding Alfa Financial Software or generate 68.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Alfa Financial Software vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Alfa Financial Software |
| Prosiebensat 1 Media |
Alfa Financial and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Prosiebensat
The main advantage of trading using opposite Alfa Financial and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
| Prosiebensat vs. Haverty Furniture Companies | Prosiebensat vs. Guidewire Software | Prosiebensat vs. Alfa Financial Software | Prosiebensat vs. PSI Software AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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