Correlation Between ProSiebenSat1 Media and Saga Communications
Can any of the company-specific risk be diversified away by investing in both ProSiebenSat1 Media and Saga Communications 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 Saga Communications 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 Saga Communications, you can compare the effects of market volatilities on ProSiebenSat1 Media and Saga Communications 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 Saga Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and Saga Communications.
Diversification Opportunities for ProSiebenSat1 Media and Saga Communications
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProSiebenSat1 and Saga is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ProSiebenSat1 Media AG and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications 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 Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of ProSiebenSat1 Media i.e., ProSiebenSat1 Media and Saga Communications go up and down completely randomly.
Pair Corralation between ProSiebenSat1 Media and Saga Communications
Assuming the 90 days horizon ProSiebenSat1 Media is expected to generate 1.05 times less return on investment than Saga Communications. In addition to that, ProSiebenSat1 Media is 1.34 times more volatile than Saga Communications. It trades about 0.16 of its total potential returns per unit of risk. Saga Communications is currently generating about 0.23 per unit of volatility. If you would invest 1,126 in Saga Communications on November 3, 2024 and sell it today you would earn a total of 116.00 from holding Saga Communications or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProSiebenSat1 Media AG vs. Saga Communications
Performance |
| Timeline |
| ProSiebenSat1 Media |
| Saga Communications |
ProSiebenSat1 Media and Saga Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProSiebenSat1 Media and Saga Communications
The main advantage of trading using opposite ProSiebenSat1 Media and Saga Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProSiebenSat1 Media position performs unexpectedly, Saga Communications 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 Saga Communications will offset losses from the drop in Saga Communications' long position.| ProSiebenSat1 Media vs. RTL Group SA | ProSiebenSat1 Media vs. iHeartMedia | ProSiebenSat1 Media vs. ITV PLC ADR | ProSiebenSat1 Media vs. RTL Group SA |
| Saga Communications vs. iHeartMedia Class A | Saga Communications vs. Beasley Broadcast Group | Saga Communications vs. Cumulus Media Class | Saga Communications vs. Mediaco Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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