Correlation Between PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and PARKEN Sport Entertainment, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PROSIEBENSAT1 and PARKEN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to under-perform the PARKEN Sport. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.55 times more volatile than PARKEN Sport Entertainment. It trades about -0.07 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.05 per unit of volatility. If you would invest 1,620 in PARKEN Sport Entertainment on September 13, 2024 and sell it today you would earn a total of 55.00 from holding PARKEN Sport Entertainment or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| PARKEN Sport Enterta |
PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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