Correlation Between Prosus NV and Ebusco Holding
Can any of the company-specific risk be diversified away by investing in both Prosus NV and Ebusco Holding 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 Prosus NV and Ebusco Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV and Ebusco Holding BV, you can compare the effects of market volatilities on Prosus NV and Ebusco Holding 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 Prosus NV with a short position of Ebusco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and Ebusco Holding.
Diversification Opportunities for Prosus NV and Ebusco Holding
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prosus and Ebusco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV and Ebusco Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebusco Holding BV and Prosus NV 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 Prosus NV are associated (or correlated) with Ebusco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebusco Holding BV has no effect on the direction of Prosus NV i.e., Prosus NV and Ebusco Holding go up and down completely randomly.
Pair Corralation between Prosus NV and Ebusco Holding
Assuming the 90 days trading horizon Prosus NV is expected to generate 0.07 times more return on investment than Ebusco Holding. However, Prosus NV is 15.24 times less risky than Ebusco Holding. It trades about -0.07 of its potential returns per unit of risk. Ebusco Holding BV is currently generating about -0.1 per unit of risk. If you would invest 3,900 in Prosus NV on August 24, 2024 and sell it today you would lose (90.00) from holding Prosus NV or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus NV vs. Ebusco Holding BV
Performance |
| Timeline |
| Prosus NV |
| Ebusco Holding BV |
Prosus NV and Ebusco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and Ebusco Holding
The main advantage of trading using opposite Prosus NV and Ebusco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, Ebusco Holding 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 Ebusco Holding will offset losses from the drop in Ebusco Holding's long position.| Prosus NV vs. Just Eat Takeaway | Prosus NV vs. ASML Holding NV | Prosus NV vs. Koninklijke Ahold Delhaize | Prosus NV vs. Adyen NV |
| Ebusco Holding vs. CM NV | Ebusco Holding vs. BE Semiconductor Industries | Ebusco Holding vs. Alfen Beheer BV | Ebusco Holding vs. ASR Nederland NV |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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