Correlation Between Prosiebensat and Nufarm
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Nufarm 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 Nufarm 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 Nufarm Limited, you can compare the effects of market volatilities on Prosiebensat and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Nufarm.
Diversification Opportunities for Prosiebensat and Nufarm
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosiebensat and Nufarm is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of Prosiebensat i.e., Prosiebensat and Nufarm go up and down completely randomly.
Pair Corralation between Prosiebensat and Nufarm
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the Nufarm. In addition to that, Prosiebensat is 1.45 times more volatile than Nufarm Limited. It trades about -0.02 of its total potential returns per unit of risk. Nufarm Limited is currently generating about -0.03 per unit of volatility. If you would invest 277.00 in Nufarm Limited on September 12, 2024 and sell it today you would lose (57.00) from holding Nufarm Limited or give up 20.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Nufarm Limited
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Nufarm Limited |
Prosiebensat and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Nufarm
The main advantage of trading using opposite Prosiebensat and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| Prosiebensat vs. Vivendi SE | Prosiebensat vs. News Corporation | Prosiebensat vs. Superior Plus Corp | Prosiebensat vs. NMI Holdings |
| Nufarm vs. Superior Plus Corp | Nufarm vs. SIVERS SEMICONDUCTORS AB | Nufarm vs. NorAm Drilling AS | Nufarm vs. Norsk Hydro ASA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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