Correlation Between PROSIEBENSAT1 MEDIADR4/ and Fresenius
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and Fresenius 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 Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and Fresenius SE Co, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and Fresenius 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 Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and Fresenius.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and Fresenius
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PROSIEBENSAT1 and Fresenius is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and Fresenius go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and Fresenius
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 3.71 times more return on investment than Fresenius. However, PROSIEBENSAT1 MEDIADR4/ is 3.71 times more volatile than Fresenius SE Co. It trades about 0.09 of its potential returns per unit of risk. Fresenius SE Co is currently generating about 0.2 per unit of risk. If you would invest 124.00 in PROSIEBENSAT1 MEDIADR4 on September 13, 2024 and sell it today you would earn a total of 8.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. Fresenius SE Co
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| Fresenius SE |
PROSIEBENSAT1 MEDIADR4/ and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and Fresenius
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, Fresenius 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 Fresenius will offset losses from the drop in Fresenius' long position.| PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc |
| Fresenius vs. Tencent Music Entertainment | Fresenius vs. PROSIEBENSAT1 MEDIADR4 | Fresenius vs. China Communications Services | Fresenius vs. Entravision Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |