Correlation Between Aozora Bank and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Aozora Bank 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 Aozora Bank and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Prosiebensat 1 Media, you can compare the effects of market volatilities on Aozora Bank 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 Aozora Bank with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Prosiebensat.
Diversification Opportunities for Aozora Bank and Prosiebensat
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aozora and Prosiebensat is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank 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 Aozora Bank 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 Aozora Bank 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 Aozora Bank i.e., Aozora Bank and Prosiebensat go up and down completely randomly.
Pair Corralation between Aozora Bank and Prosiebensat
Assuming the 90 days horizon Aozora Bank is expected to generate 0.74 times more return on investment than Prosiebensat. However, Aozora Bank is 1.36 times less risky than Prosiebensat. It trades about -0.08 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.09 per unit of risk. If you would invest 1,600 in Aozora Bank on September 26, 2024 and sell it today you would lose (160.00) from holding Aozora Bank or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Aozora Bank |
| Prosiebensat 1 Media |
Aozora Bank and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Prosiebensat
The main advantage of trading using opposite Aozora Bank and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank 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.| Aozora Bank vs. Clean Energy Fuels | Aozora Bank vs. Chuangs China Investments | Aozora Bank vs. ULTRA CLEAN HLDGS | Aozora Bank vs. CVW CLEANTECH INC |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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