Correlation Between PROSIEBENSAT1 MEDIADR4/ and AXA SA
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and AXA SA 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 AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and AXA SA, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and AXA SA.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and AXA SA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PROSIEBENSAT1 and AXA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and AXA SA go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and AXA SA
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 2.13 times more return on investment than AXA SA. However, PROSIEBENSAT1 MEDIADR4/ is 2.13 times more volatile than AXA SA. It trades about 0.12 of its potential returns per unit of risk. AXA SA is currently generating about 0.2 per unit of risk. If you would invest 130.00 in PROSIEBENSAT1 MEDIADR4 on December 2, 2024 and sell it today you would earn a total of 14.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. AXA SA
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| AXA SA |
PROSIEBENSAT1 MEDIADR4/ and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and AXA SA
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| PROSIEBENSAT1 MEDIADR4/ vs. DATANG INTL POW | PROSIEBENSAT1 MEDIADR4/ vs. Linedata Services SA | PROSIEBENSAT1 MEDIADR4/ vs. Sch Environnement SA | PROSIEBENSAT1 MEDIADR4/ vs. NTT DATA |
| AXA SA vs. United States Steel | AXA SA vs. Veolia Environnement SA | AXA SA vs. IRONVELD PLC LS | AXA SA vs. CHINA SOUTHN AIR H |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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