Correlation Between Select Medical and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Select Medical and Prosiebensat 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 Select Medical and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Medical Holdings and Prosiebensat 1 Media, you can compare the effects of market volatilities on Select Medical and Prosiebensat 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 Select Medical with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and Prosiebensat.
Diversification Opportunities for Select Medical and Prosiebensat
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Select and Prosiebensat is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and Select Medical 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 Select Medical Holdings are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Select Medical i.e., Select Medical and Prosiebensat go up and down completely randomly.
Pair Corralation between Select Medical and Prosiebensat
Assuming the 90 days horizon Select Medical Holdings is expected to under-perform the Prosiebensat. In addition to that, Select Medical is 1.96 times more volatile than Prosiebensat 1 Media. It trades about -0.05 of its total potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.01 per unit of volatility. If you would invest 600.00 in Prosiebensat 1 Media on November 3, 2024 and sell it today you would lose (43.00) from holding Prosiebensat 1 Media or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Medical Holdings vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Select Medical Holdings |
| Prosiebensat 1 Media |
Select Medical and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and Prosiebensat
The main advantage of trading using opposite Select Medical and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Select Medical vs. PLAYMATES TOYS | Select Medical vs. SILVER BULLET DATA | Select Medical vs. Linedata Services SA | Select Medical vs. Automatic Data Processing |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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