Correlation Between Hansa Investment and Prosiebensat

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

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

Diversification Opportunities for Hansa Investment and Prosiebensat

0.18

Correlation Coefficient

Hansa Investment  Prosiebensat

Average diversification

The 3 months correlation between Hansa and Prosiebensat is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and Prosiebensat go up and down completely randomly.

Pair Corralation between Hansa Investment and Prosiebensat

Assuming the 90 days trading horizon Hansa Investment is expected to generate 1.58 times less return on investment than Prosiebensat. But when comparing it to its historical volatility, Hansa Investment is 2.24 times less risky than Prosiebensat. It trades about 0.14 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  468.00  in Prosiebensat 1 Media on September 27, 2024 and sell it today you would earn a total of  33.00  from holding Prosiebensat 1 Media or generate 7.05% return on investment over 90 days.

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

Hansa Investment  vs.  Prosiebensat 1 Media

Hansa Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hansa Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Prosiebensat 1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosiebensat 1 Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hansa Investment and Prosiebensat

The main advantage of trading using opposite Hansa Investment and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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 Hansa Investment 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.