Correlation Between Arena Group and Prosus
Can any of the company-specific risk be diversified away by investing in both Arena Group and Prosus 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 Arena Group and Prosus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Prosus, you can compare the effects of market volatilities on Arena Group and Prosus 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 Arena Group with a short position of Prosus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Prosus.
Diversification Opportunities for Arena Group and Prosus
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arena and Prosus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Prosus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus and Arena Group 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 Arena Group Holdings are associated (or correlated) with Prosus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus has no effect on the direction of Arena Group i.e., Arena Group and Prosus go up and down completely randomly.
Pair Corralation between Arena Group and Prosus
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 30.21 times more return on investment than Prosus. However, Arena Group is 30.21 times more volatile than Prosus. It trades about 0.18 of its potential returns per unit of risk. Prosus is currently generating about -0.22 per unit of risk. If you would invest 67.00 in Arena Group Holdings on August 28, 2024 and sell it today you would earn a total of 86.00 from holding Arena Group Holdings or generate 128.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arena Group Holdings vs. Prosus
Performance |
| Timeline |
| Arena Group Holdings |
| Prosus |
Arena Group and Prosus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Prosus
The main advantage of trading using opposite Arena Group and Prosus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Prosus 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 Prosus will offset losses from the drop in Prosus' long position.| Arena Group vs. Trivago NV | Arena Group vs. Cheetah Mobile | Arena Group vs. Comscore | Arena Group vs. Thryv Holdings |
| Prosus vs. Tencent Holdings | Prosus vs. Autohome | Prosus vs. Arena Group Holdings | Prosus vs. Golden Grail Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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