Correlation Between Saga Communications and ProSiebenSat1 Media
Can any of the company-specific risk be diversified away by investing in both Saga Communications and ProSiebenSat1 Media 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 Saga Communications and ProSiebenSat1 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Communications and ProSiebenSat1 Media AG, you can compare the effects of market volatilities on Saga Communications and ProSiebenSat1 Media 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 Saga Communications with a short position of ProSiebenSat1 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Communications and ProSiebenSat1 Media.
Diversification Opportunities for Saga Communications and ProSiebenSat1 Media
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saga and ProSiebenSat1 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Saga Communications and ProSiebenSat1 Media AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProSiebenSat1 Media and Saga Communications 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 Saga Communications are associated (or correlated) with ProSiebenSat1 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProSiebenSat1 Media has no effect on the direction of Saga Communications i.e., Saga Communications and ProSiebenSat1 Media go up and down completely randomly.
Pair Corralation between Saga Communications and ProSiebenSat1 Media
Considering the 90-day investment horizon Saga Communications is expected to under-perform the ProSiebenSat1 Media. But the stock apears to be less risky and, when comparing its historical volatility, Saga Communications is 1.72 times less risky than ProSiebenSat1 Media. The stock trades about -0.13 of its potential returns per unit of risk. The ProSiebenSat1 Media AG is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 177.00 in ProSiebenSat1 Media AG on August 28, 2024 and sell it today you would lose (56.00) from holding ProSiebenSat1 Media AG or give up 31.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.13% |
| Values | Daily Returns |
Saga Communications vs. ProSiebenSat1 Media AG
Performance |
| Timeline |
| Saga Communications |
| ProSiebenSat1 Media |
Saga Communications and ProSiebenSat1 Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Communications and ProSiebenSat1 Media
The main advantage of trading using opposite Saga Communications and ProSiebenSat1 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Communications position performs unexpectedly, ProSiebenSat1 Media 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 ProSiebenSat1 Media will offset losses from the drop in ProSiebenSat1 Media's long position.| Saga Communications vs. Walt Disney | Saga Communications vs. Roku Inc | Saga Communications vs. Netflix | Saga Communications vs. AMC Entertainment Holdings |
| ProSiebenSat1 Media vs. RTL Group SA | ProSiebenSat1 Media vs. iHeartMedia | ProSiebenSat1 Media vs. ITV PLC ADR | ProSiebenSat1 Media vs. RTL Group SA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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