Correlation Between PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING 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 PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING 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 PROSIEBENSAT1 MEDIADR4 with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PROSIEBENSAT1 and FRACTAL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP and PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4 are associated (or correlated) with FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of PROSIEBENSAT1 MEDIADR4 i.e., PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 3.57 times less return on investment than FRACTAL GAMING. In addition to that, PROSIEBENSAT1 MEDIADR4 is 1.04 times more volatile than FRACTAL GAMING GROUP. It trades about 0.07 of its total potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.25 per unit of volatility. If you would invest 263.00 in FRACTAL GAMING GROUP on October 25, 2024 and sell it today you would earn a total of 28.00 from holding FRACTAL GAMING GROUP or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4 |
| FRACTAL GAMING GROUP |
PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4 and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4 position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.| PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc |
| FRACTAL GAMING vs. ZINC MEDIA GR | FRACTAL GAMING vs. Townsquare Media | FRACTAL GAMING vs. PROSIEBENSAT1 MEDIADR4 | FRACTAL GAMING vs. GigaMedia |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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