Correlation Between PROSIEBENSAT1 MEDIADR4/ and TriMas
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and TriMas 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 TriMas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and TriMas, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and TriMas 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 TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and TriMas.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and TriMas
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PROSIEBENSAT1 and TriMas is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas 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 TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and TriMas go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and TriMas
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 0.65 times more return on investment than TriMas. However, PROSIEBENSAT1 MEDIADR4 is 1.55 times less risky than TriMas. It trades about -0.01 of its potential returns per unit of risk. TriMas is currently generating about -0.1 per unit of risk. If you would invest 123.00 in PROSIEBENSAT1 MEDIADR4 on October 24, 2024 and sell it today you would lose (1.00) from holding PROSIEBENSAT1 MEDIADR4 or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. TriMas
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| TriMas |
PROSIEBENSAT1 MEDIADR4/ and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and TriMas
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| PROSIEBENSAT1 MEDIADR4/ vs. Q2M Managementberatung AG | PROSIEBENSAT1 MEDIADR4/ vs. Sims Metal Management | PROSIEBENSAT1 MEDIADR4/ vs. Perdoceo Education | PROSIEBENSAT1 MEDIADR4/ vs. TRAINLINE PLC LS |
| TriMas vs. Synovus Financial Corp | TriMas vs. REVO INSURANCE SPA | TriMas vs. Webster Financial | TriMas vs. TIANDE CHEMICAL |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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