Correlation Between Snap On and ProSiebenSat1 Media
Can any of the company-specific risk be diversified away by investing in both Snap On 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 Snap On and ProSiebenSat1 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and ProSiebenSat1 Media AG, you can compare the effects of market volatilities on Snap On 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 Snap On with a short position of ProSiebenSat1 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and ProSiebenSat1 Media.
Diversification Opportunities for Snap On and ProSiebenSat1 Media
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and ProSiebenSat1 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and ProSiebenSat1 Media AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProSiebenSat1 Media and Snap On 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 Snap On 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 Snap On i.e., Snap On and ProSiebenSat1 Media go up and down completely randomly.
Pair Corralation between Snap On and ProSiebenSat1 Media
Considering the 90-day investment horizon Snap On is expected to generate 0.5 times more return on investment than ProSiebenSat1 Media. However, Snap On is 2.0 times less risky than ProSiebenSat1 Media. It trades about 0.38 of its potential returns per unit of risk. ProSiebenSat1 Media AG is currently generating about -0.36 per unit of risk. If you would invest 33,060 in Snap On on August 28, 2024 and sell it today you would earn a total of 4,004 from holding Snap On or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap On vs. ProSiebenSat1 Media AG
Performance |
| Timeline |
| Snap On |
| ProSiebenSat1 Media |
Snap On and ProSiebenSat1 Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and ProSiebenSat1 Media
The main advantage of trading using opposite Snap On and ProSiebenSat1 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On 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.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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