Correlation Between Prosiebensat and CSL
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and CSL 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 CSL 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 CSL Limited, you can compare the effects of market volatilities on Prosiebensat and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and CSL.
Diversification Opportunities for Prosiebensat and CSL
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prosiebensat and CSL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Prosiebensat i.e., Prosiebensat and CSL go up and down completely randomly.
Pair Corralation between Prosiebensat and CSL
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the CSL. In addition to that, Prosiebensat is 2.06 times more volatile than CSL Limited. It trades about -0.02 of its total potential returns per unit of risk. CSL Limited is currently generating about -0.01 per unit of volatility. If you would invest 17,604 in CSL Limited on November 27, 2024 and sell it today you would lose (1,986) from holding CSL Limited or give up 11.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. CSL Limited
Performance |
| Timeline |
| Prosiebensat 1 Media |
| CSL Limited |
Prosiebensat and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and CSL
The main advantage of trading using opposite Prosiebensat and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Prosiebensat vs. Gaztransport et technigaz | Prosiebensat vs. betterU Education Corp | Prosiebensat vs. Perdoceo Education | Prosiebensat vs. JD SPORTS FASH |
| CSL vs. GREENX METALS LTD | CSL vs. EMBARK EDUCATION LTD | CSL vs. GALENA MINING LTD | CSL vs. Laureate Education |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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