Correlation Between PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING 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 AOYAMA TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and AOYAMA TRADING, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PROSIEBENSAT1 and AOYAMA is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to under-perform the AOYAMA TRADING. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.72 times more volatile than AOYAMA TRADING. It trades about -0.22 of its total potential returns per unit of risk. AOYAMA TRADING is currently generating about -0.27 per unit of volatility. If you would invest 1,400 in AOYAMA TRADING on October 13, 2024 and sell it today you would lose (90.00) from holding AOYAMA TRADING or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. AOYAMA TRADING
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| AOYAMA TRADING |
PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.| PROSIEBENSAT1 MEDIADR4/ vs. De Grey Mining | PROSIEBENSAT1 MEDIADR4/ vs. MAGNUM MINING EXP | PROSIEBENSAT1 MEDIADR4/ vs. CEOTRONICS | PROSIEBENSAT1 MEDIADR4/ vs. MCEWEN MINING INC |
| AOYAMA TRADING vs. PENN NATL GAMING | AOYAMA TRADING vs. GigaMedia | AOYAMA TRADING vs. BRAGG GAMING GRP | AOYAMA TRADING vs. PROSIEBENSAT1 MEDIADR4 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |