Correlation Between Sage Group and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Sage Group 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 Sage Group and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Group PLC and Prosiebensat 1 Media, you can compare the effects of market volatilities on Sage Group 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 Sage Group with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Prosiebensat.
Diversification Opportunities for Sage Group and Prosiebensat
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sage and Prosiebensat is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC 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 Sage Group 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 Sage Group PLC 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 Sage Group i.e., Sage Group and Prosiebensat go up and down completely randomly.
Pair Corralation between Sage Group and Prosiebensat
Assuming the 90 days trading horizon Sage Group PLC is expected to generate 0.38 times more return on investment than Prosiebensat. However, Sage Group PLC is 2.62 times less risky than Prosiebensat. It trades about 0.23 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.0 per unit of risk. If you would invest 127,668 in Sage Group PLC on October 21, 2024 and sell it today you would earn a total of 3,932 from holding Sage Group PLC or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sage Group PLC vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Sage Group PLC |
| Prosiebensat 1 Media |
Sage Group and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Prosiebensat
The main advantage of trading using opposite Sage Group and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group 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.| Sage Group vs. Berkshire Hathaway | Sage Group vs. Samsung Electronics Co | Sage Group vs. Samsung Electronics Co | Sage Group vs. Chocoladefabriken Lindt Spruengli |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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