Correlation Between Gray Television and ProSiebenSat1 Media
Can any of the company-specific risk be diversified away by investing in both Gray Television 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 Gray Television and ProSiebenSat1 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gray Television and ProSiebenSat1 Media AG, you can compare the effects of market volatilities on Gray Television 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 Gray Television with a short position of ProSiebenSat1 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and ProSiebenSat1 Media.
Diversification Opportunities for Gray Television and ProSiebenSat1 Media
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gray and ProSiebenSat1 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and ProSiebenSat1 Media AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProSiebenSat1 Media and Gray Television 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 Gray Television 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 Gray Television i.e., Gray Television and ProSiebenSat1 Media go up and down completely randomly.
Pair Corralation between Gray Television and ProSiebenSat1 Media
Considering the 90-day investment horizon Gray Television is expected to under-perform the ProSiebenSat1 Media. In addition to that, Gray Television is 1.3 times more volatile than ProSiebenSat1 Media AG. It trades about -0.02 of its total potential returns per unit of risk. ProSiebenSat1 Media AG is currently generating about -0.03 per unit of volatility. If you would invest 221.00 in ProSiebenSat1 Media AG on August 27, 2024 and sell it today you would lose (100.00) from holding ProSiebenSat1 Media AG or give up 45.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Gray Television vs. ProSiebenSat1 Media AG
Performance |
| Timeline |
| Gray Television |
| ProSiebenSat1 Media |
Gray Television and ProSiebenSat1 Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gray Television and ProSiebenSat1 Media
The main advantage of trading using opposite Gray Television and ProSiebenSat1 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television 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.| Gray Television vs. E W Scripps | Gray Television vs. Saga Communications | Gray Television vs. iHeartMedia Class A | Gray Television vs. Cumulus Media Class |
| ProSiebenSat1 Media vs. RTL Group SA | ProSiebenSat1 Media vs. iHeartMedia | ProSiebenSat1 Media vs. ITV PLC ADR | 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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