Correlation Between MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/ 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 MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and PROSIEBENSAT1 MEDIADR4, you can compare the effects of market volatilities on MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/ 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 MAVEN WIRELESS with a short position of PROSIEBENSAT1 MEDIADR4/. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/.

Diversification Opportunities for MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/

0.64

Correlation Coefficient

MAVEN WIRELESS  PROSIEBENSAT1 MEDIADR4/

Poor diversification

The 3 months correlation between MAVEN and PROSIEBENSAT1 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ and MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN are associated (or correlated) with PROSIEBENSAT1 MEDIADR4/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSIEBENSAT1 MEDIADR4/ has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/

Assuming the 90 days horizon MAVEN WIRELESS is expected to generate 7.67 times less return on investment than PROSIEBENSAT1 MEDIADR4/. In addition to that, MAVEN WIRELESS is 1.05 times more volatile than PROSIEBENSAT1 MEDIADR4. It trades about 0.02 of its total potential returns per unit of risk. PROSIEBENSAT1 MEDIADR4 is currently generating about 0.13 per unit of volatility. If you would invest  115.00  in PROSIEBENSAT1 MEDIADR4 on September 23, 2024 and sell it today you would earn a total of  10.00  from holding PROSIEBENSAT1 MEDIADR4 or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  PROSIEBENSAT1 MEDIADR4

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN 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.

PROSIEBENSAT1 MEDIADR4/

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PROSIEBENSAT1 MEDIADR4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, PROSIEBENSAT1 MEDIADR4/ is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/

The main advantage of trading using opposite MAVEN WIRELESS and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS position performs unexpectedly, PROSIEBENSAT1 MEDIADR4/ 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 MEDIADR4/ will offset losses from the drop in PROSIEBENSAT1 MEDIADR4/'s long position.

The idea behind MAVEN WIRELESS SWEDEN and PROSIEBENSAT1 MEDIADR4 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 Transaction History module to view history of all your transactions and understand their impact on performance.