Correlation Between PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics 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 Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and Benchmark Electronics, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PROSIEBENSAT1 and Benchmark is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to under-perform the Benchmark Electronics. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.41 times more volatile than Benchmark Electronics. It trades about -0.02 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.06 per unit of volatility. If you would invest 2,517 in Benchmark Electronics on October 11, 2024 and sell it today you would earn a total of 1,943 from holding Benchmark Electronics or generate 77.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. Benchmark Electronics
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| Benchmark Electronics |
PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| PROSIEBENSAT1 MEDIADR4/ vs. PENN Entertainment | PROSIEBENSAT1 MEDIADR4/ vs. ON SEMICONDUCTOR | PROSIEBENSAT1 MEDIADR4/ vs. Tower Semiconductor | PROSIEBENSAT1 MEDIADR4/ vs. CNVISION MEDIA |
| Benchmark Electronics vs. Hisense Home Appliances | Benchmark Electronics vs. PROSIEBENSAT1 MEDIADR4 | Benchmark Electronics vs. Corporate Office Properties | Benchmark Electronics vs. Nexstar Media Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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