Correlation Between PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL 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 AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and AUST AGRICULTURAL, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PROSIEBENSAT1 and AUST is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 3.59 times more return on investment than AUST AGRICULTURAL. However, PROSIEBENSAT1 MEDIADR4/ is 3.59 times more volatile than AUST AGRICULTURAL. It trades about 0.1 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.05 per unit of risk. If you would invest 121.00 in PROSIEBENSAT1 MEDIADR4 on September 19, 2024 and sell it today you would earn a total of 8.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 6.61% 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. AUST AGRICULTURAL
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| AUST AGRICULTURAL |
PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc |
| AUST AGRICULTURAL vs. PROSIEBENSAT1 MEDIADR4 | AUST AGRICULTURAL vs. Playtech plc | AUST AGRICULTURAL vs. LG Display Co | AUST AGRICULTURAL vs. Tencent Music Entertainment |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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