Correlation Between ProSiebenSat1 Media and Salem Media
Can any of the company-specific risk be diversified away by investing in both ProSiebenSat1 Media and Salem 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 ProSiebenSat1 Media and Salem Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProSiebenSat1 Media AG and Salem Media Group, you can compare the effects of market volatilities on ProSiebenSat1 Media and Salem 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 ProSiebenSat1 Media with a short position of Salem Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and Salem Media.
Diversification Opportunities for ProSiebenSat1 Media and Salem Media
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProSiebenSat1 and Salem is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ProSiebenSat1 Media AG and Salem Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salem Media Group and ProSiebenSat1 Media 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 ProSiebenSat1 Media AG are associated (or correlated) with Salem Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salem Media Group has no effect on the direction of ProSiebenSat1 Media i.e., ProSiebenSat1 Media and Salem Media go up and down completely randomly.
Pair Corralation between ProSiebenSat1 Media and Salem Media
Assuming the 90 days horizon ProSiebenSat1 Media AG is expected to generate 0.99 times more return on investment than Salem Media. However, ProSiebenSat1 Media AG is 1.01 times less risky than Salem Media. It trades about -0.03 of its potential returns per unit of risk. Salem Media Group is currently generating about -0.03 per unit of risk. 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 | Very Weak |
| Accuracy | 32.92% |
| Values | Daily Returns |
ProSiebenSat1 Media AG vs. Salem Media Group
Performance |
| Timeline |
| ProSiebenSat1 Media |
| Salem Media Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProSiebenSat1 Media and Salem Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProSiebenSat1 Media and Salem Media
The main advantage of trading using opposite ProSiebenSat1 Media and Salem Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProSiebenSat1 Media position performs unexpectedly, Salem 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 Salem Media will offset losses from the drop in Salem Media's long position.| ProSiebenSat1 Media vs. RTL Group SA | ProSiebenSat1 Media vs. iHeartMedia | ProSiebenSat1 Media vs. ITV PLC ADR | ProSiebenSat1 Media vs. RTL Group SA |
| Salem Media vs. Mediaco Holding | Salem Media vs. Saga Communications | Salem Media vs. ProSiebenSat1 Media AG | Salem Media vs. Cumulus Media Class |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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