Correlation Between Optima Health and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Optima Health 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 Optima Health and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Prosiebensat 1 Media, you can compare the effects of market volatilities on Optima Health 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 Optima Health with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Prosiebensat.
Diversification Opportunities for Optima Health and Prosiebensat
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Prosiebensat is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc 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 Optima Health 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 Optima Health plc 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 Optima Health i.e., Optima Health and Prosiebensat go up and down completely randomly.
Pair Corralation between Optima Health and Prosiebensat
Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.26 times more return on investment than Prosiebensat. However, Optima Health plc is 3.89 times less risky than Prosiebensat. It trades about -0.26 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.32 per unit of risk. If you would invest 16,100 in Optima Health plc on September 3, 2024 and sell it today you would lose (550.00) from holding Optima Health plc or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Optima Health plc |
| Prosiebensat 1 Media |
Optima Health and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Prosiebensat
The main advantage of trading using opposite Optima Health and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health 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.| Optima Health vs. Vulcan Materials Co | Optima Health vs. Morgan Advanced Materials | Optima Health vs. Verizon Communications | Optima Health vs. Zoom Video Communications |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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