Correlation Between Prosiebensat and News
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and News 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 News 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 News Corporation, you can compare the effects of market volatilities on Prosiebensat and News 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 News. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and News.
Diversification Opportunities for Prosiebensat and News
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prosiebensat and News is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of Prosiebensat i.e., Prosiebensat and News go up and down completely randomly.
Pair Corralation between Prosiebensat and News
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the News. In addition to that, Prosiebensat is 1.6 times more volatile than News Corporation. It trades about -0.03 of its total potential returns per unit of risk. News Corporation is currently generating about 0.07 per unit of volatility. If you would invest 1,657 in News Corporation on September 3, 2024 and sell it today you would earn a total of 1,103 from holding News Corporation or generate 66.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. News Corp.
Performance |
| Timeline |
| Prosiebensat 1 Media |
| News |
Prosiebensat and News Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and News
The main advantage of trading using opposite Prosiebensat and News positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, News 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 News will offset losses from the drop in News' long position.| Prosiebensat vs. Vivendi SE | Prosiebensat vs. RTL GROUP UNSPADR | Prosiebensat vs. Superior Plus Corp | Prosiebensat vs. NMI Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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