Correlation Between ProSiebenSat1 Media and TV Asahi
Can any of the company-specific risk be diversified away by investing in both ProSiebenSat1 Media and TV Asahi 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 TV Asahi 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 TV Asahi Holdings, you can compare the effects of market volatilities on ProSiebenSat1 Media and TV Asahi 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 TV Asahi. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and TV Asahi.
Diversification Opportunities for ProSiebenSat1 Media and TV Asahi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProSiebenSat1 and THDDY is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ProSiebenSat1 Media AG and TV Asahi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Asahi Holdings 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 TV Asahi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Asahi Holdings has no effect on the direction of ProSiebenSat1 Media i.e., ProSiebenSat1 Media and TV Asahi go up and down completely randomly.
Pair Corralation between ProSiebenSat1 Media and TV Asahi
Assuming the 90 days horizon ProSiebenSat1 Media AG is expected to under-perform the TV Asahi. In addition to that, ProSiebenSat1 Media is 1.38 times more volatile than TV Asahi Holdings. It trades about -0.01 of its total potential returns per unit of risk. TV Asahi Holdings is currently generating about 0.04 per unit of volatility. If you would invest 1,046 in TV Asahi Holdings on September 14, 2024 and sell it today you would earn a total of 244.00 from holding TV Asahi Holdings or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.77% |
| Values | Daily Returns |
ProSiebenSat1 Media AG vs. TV Asahi Holdings
Performance |
| Timeline |
| ProSiebenSat1 Media |
| TV Asahi Holdings |
ProSiebenSat1 Media and TV Asahi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProSiebenSat1 Media and TV Asahi
The main advantage of trading using opposite ProSiebenSat1 Media and TV Asahi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProSiebenSat1 Media position performs unexpectedly, TV Asahi 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 TV Asahi will offset losses from the drop in TV Asahi'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 |
| TV Asahi vs. ProSiebenSat1 Media AG | TV Asahi vs. RTL Group SA | TV Asahi vs. iHeartMedia | TV Asahi vs. TV Azteca SAB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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