Correlation Between Pensionbee Group and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Pensionbee Group 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 Pensionbee Group and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pensionbee Group PLC and Prosiebensat 1 Media, you can compare the effects of market volatilities on Pensionbee Group 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 Pensionbee Group with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pensionbee Group and Prosiebensat.
Diversification Opportunities for Pensionbee Group and Prosiebensat
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pensionbee and Prosiebensat is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pensionbee Group 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 Pensionbee 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 Pensionbee Group 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 Pensionbee Group i.e., Pensionbee Group and Prosiebensat go up and down completely randomly.
Pair Corralation between Pensionbee Group and Prosiebensat
Assuming the 90 days trading horizon Pensionbee Group is expected to generate 17.05 times less return on investment than Prosiebensat. But when comparing it to its historical volatility, Pensionbee Group PLC is 2.08 times less risky than Prosiebensat. It trades about 0.03 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 480.00 in Prosiebensat 1 Media on September 15, 2024 and sell it today you would earn a total of 76.00 from holding Prosiebensat 1 Media or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pensionbee Group PLC vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Pensionbee Group PLC |
| Prosiebensat 1 Media |
Pensionbee Group and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pensionbee Group and Prosiebensat
The main advantage of trading using opposite Pensionbee Group and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pensionbee Group 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.| Pensionbee Group vs. Prosiebensat 1 Media | Pensionbee Group vs. Grand Vision Media | Pensionbee Group vs. Synthomer plc | Pensionbee Group vs. Everyman Media Group |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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