Correlation Between Apple and ProSiebenSat1 Media
Can any of the company-specific risk be diversified away by investing in both Apple and ProSiebenSat1 Media 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 Apple and ProSiebenSat1 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ProSiebenSat1 Media SE, you can compare the effects of market volatilities on Apple and ProSiebenSat1 Media 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 Apple with a short position of ProSiebenSat1 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ProSiebenSat1 Media.
Diversification Opportunities for Apple and ProSiebenSat1 Media
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and ProSiebenSat1 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ProSiebenSat1 Media SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProSiebenSat1 Media and Apple 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 Apple Inc are associated (or correlated) with ProSiebenSat1 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProSiebenSat1 Media has no effect on the direction of Apple i.e., Apple and ProSiebenSat1 Media go up and down completely randomly.
Pair Corralation between Apple and ProSiebenSat1 Media
Given the investment horizon of 90 days Apple Inc is expected to under-perform the ProSiebenSat1 Media. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.15 times less risky than ProSiebenSat1 Media. The stock trades about -0.46 of its potential returns per unit of risk. The ProSiebenSat1 Media SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 501.00 in ProSiebenSat1 Media SE on October 23, 2024 and sell it today you would earn a total of 4.00 from holding ProSiebenSat1 Media SE or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Apple Inc vs. ProSiebenSat1 Media SE
Performance |
| Timeline |
| Apple Inc |
| ProSiebenSat1 Media |
Apple and ProSiebenSat1 Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and ProSiebenSat1 Media
The main advantage of trading using opposite Apple and ProSiebenSat1 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, ProSiebenSat1 Media 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 Media will offset losses from the drop in ProSiebenSat1 Media's long position.The idea behind Apple Inc and ProSiebenSat1 Media SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ProSiebenSat1 Media vs. VIVENDI UNSPONARD EO | ProSiebenSat1 Media vs. News Corporation | ProSiebenSat1 Media vs. News Corporation | ProSiebenSat1 Media vs. RTL Group SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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