Correlation Between Prosiebensat and Howden Joinery
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Howden Joinery 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 Prosiebensat and Howden Joinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosiebensat 1 Media and Howden Joinery Group, you can compare the effects of market volatilities on Prosiebensat and Howden Joinery 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 Prosiebensat with a short position of Howden Joinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Howden Joinery.
Diversification Opportunities for Prosiebensat and Howden Joinery
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosiebensat and Howden is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Howden Joinery Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howden Joinery Group and Prosiebensat 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 Prosiebensat 1 Media are associated (or correlated) with Howden Joinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howden Joinery Group has no effect on the direction of Prosiebensat i.e., Prosiebensat and Howden Joinery go up and down completely randomly.
Pair Corralation between Prosiebensat and Howden Joinery
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 1.09 times more return on investment than Howden Joinery. However, Prosiebensat is 1.09 times more volatile than Howden Joinery Group. It trades about 0.22 of its potential returns per unit of risk. Howden Joinery Group is currently generating about -0.01 per unit of risk. If you would invest 513.00 in Prosiebensat 1 Media on November 5, 2024 and sell it today you would earn a total of 48.00 from holding Prosiebensat 1 Media or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Howden Joinery Group
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Howden Joinery Group |
Prosiebensat and Howden Joinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Howden Joinery
The main advantage of trading using opposite Prosiebensat and Howden Joinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Howden Joinery 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 Howden Joinery will offset losses from the drop in Howden Joinery's long position.| Prosiebensat vs. IMPERIAL TOBACCO | Prosiebensat vs. BAKED GAMES SA | Prosiebensat vs. UNIVERSAL MUSIC GROUP | Prosiebensat vs. GEAR4MUSIC LS 10 |
| Howden Joinery vs. Siemens Healthineers AG | Howden Joinery vs. Brockhaus Capital Management | Howden Joinery vs. Virtus Investment Partners | Howden Joinery vs. CDL INVESTMENT |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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