Correlation Between PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA 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 UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and UniCredit SpA, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA 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 UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PROSIEBENSAT1 and UniCredit is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to under-perform the UniCredit SpA. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.53 times more volatile than UniCredit SpA. It trades about -0.11 of its total potential returns per unit of risk. UniCredit SpA is currently generating about 0.03 per unit of volatility. If you would invest 3,917 in UniCredit SpA on October 15, 2024 and sell it today you would earn a total of 72.00 from holding UniCredit SpA or generate 1.84% 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. UniCredit SpA
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| UniCredit SpA |
PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.| PROSIEBENSAT1 MEDIADR4/ vs. Fast Retailing Co | PROSIEBENSAT1 MEDIADR4/ vs. FIH MOBILE | PROSIEBENSAT1 MEDIADR4/ vs. TRADELINK ELECTRON | PROSIEBENSAT1 MEDIADR4/ vs. SOCKET MOBILE NEW |
| UniCredit SpA vs. DXC Technology Co | UniCredit SpA vs. Firan Technology Group | UniCredit SpA vs. Corporate Travel Management | UniCredit SpA vs. Kingdee International Software |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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