Correlation Between Trellus Health and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Trellus Health 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 Trellus Health and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Prosiebensat 1 Media, you can compare the effects of market volatilities on Trellus Health 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 Trellus Health with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Prosiebensat.
Diversification Opportunities for Trellus Health and Prosiebensat
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trellus and Prosiebensat is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health 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 Trellus Health 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 Trellus Health 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 Trellus Health i.e., Trellus Health and Prosiebensat go up and down completely randomly.
Pair Corralation between Trellus Health and Prosiebensat
Assuming the 90 days trading horizon Trellus Health plc is expected to generate 85.19 times more return on investment than Prosiebensat. However, Trellus Health is 85.19 times more volatile than Prosiebensat 1 Media. It trades about 0.21 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.2 per unit of risk. If you would invest 55.00 in Trellus Health plc on October 29, 2024 and sell it today you would earn a total of 195.00 from holding Trellus Health plc or generate 354.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Trellus Health plc |
| Prosiebensat 1 Media |
Trellus Health and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Prosiebensat
The main advantage of trading using opposite Trellus Health and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health 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.| Trellus Health vs. Axfood AB | Trellus Health vs. Associated British Foods | Trellus Health vs. Dairy Farm International | Trellus Health vs. Iron Mountain |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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