Correlation Between Eastinco Mining and Prosiebensat

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

By analyzing existing cross correlation between Eastinco Mining Exploration and Prosiebensat 1 Media, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Prosiebensat.

Diversification Opportunities for Eastinco Mining and Prosiebensat

-0.39

Correlation Coefficient

Eastinco Mining  Prosiebensat

Very good diversification

The 3 months correlation between Eastinco and Prosiebensat is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Prosiebensat go up and down completely randomly.

Pair Corralation between Eastinco Mining and Prosiebensat

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to under-perform the Prosiebensat. In addition to that, Eastinco Mining is 1.11 times more volatile than Prosiebensat 1 Media. It trades about -0.04 of its total potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.17 per unit of volatility. If you would invest  505.00  in Prosiebensat 1 Media on December 27, 2024 and sell it today you would earn a total of  143.00  from holding Prosiebensat 1 Media or generate 28.32% return on investment over 90 days.

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

Eastinco Mining Exploration  vs.  Prosiebensat 1 Media

Eastinco Mining Expl

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Prosiebensat 1 Media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prosiebensat 1 Media are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Prosiebensat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eastinco Mining and Prosiebensat

The main advantage of trading using opposite Eastinco Mining and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.

The idea behind Eastinco Mining Exploration and Prosiebensat 1 Media 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.