Correlation Between Prosus NV and ENTREPARTICULIERS

Can any of the company-specific risk be diversified away by investing in both Prosus NV and ENTREPARTICULIERS 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 Prosus NV and ENTREPARTICULIERS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prosus NV and ENTREPARTICULIERS EO 10, you can compare the effects of market volatilities on Prosus NV and ENTREPARTICULIERS 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 Prosus NV with a short position of ENTREPARTICULIERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and ENTREPARTICULIERS.

Diversification Opportunities for Prosus NV and ENTREPARTICULIERS

-0.13

Correlation Coefficient

Prosus NV  ENTREPARTICULIERS

Good diversification

The 3 months correlation between Prosus and ENTREPARTICULIERS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV and ENTREPARTICULIERS EO 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTREPARTICULIERS EO and Prosus NV 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 Prosus NV are associated (or correlated) with ENTREPARTICULIERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTREPARTICULIERS EO has no effect on the direction of Prosus NV i.e., Prosus NV and ENTREPARTICULIERS go up and down completely randomly.

Pair Corralation between Prosus NV and ENTREPARTICULIERS

Assuming the 90 days horizon Prosus NV is expected to under-perform the ENTREPARTICULIERS. But the stock apears to be less risky and, when comparing its historical volatility, Prosus NV is 4.26 times less risky than ENTREPARTICULIERS. The stock trades about -0.1 of its potential returns per unit of risk. The ENTREPARTICULIERS EO 10 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  47.00  in ENTREPARTICULIERS EO 10 on October 26, 2024 and sell it today you would lose (9.00) from holding ENTREPARTICULIERS EO 10 or give up 19.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Prosus NV  vs.  ENTREPARTICULIERS EO 10

Prosus NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosus NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ENTREPARTICULIERS EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENTREPARTICULIERS EO 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ENTREPARTICULIERS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Prosus NV and ENTREPARTICULIERS

The main advantage of trading using opposite Prosus NV and ENTREPARTICULIERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, ENTREPARTICULIERS 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 ENTREPARTICULIERS will offset losses from the drop in ENTREPARTICULIERS's long position.

The idea behind Prosus NV and ENTREPARTICULIERS EO 10 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.