Correlation Between CODERE ONLINE and Prosiebensat

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

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

Diversification Opportunities for CODERE ONLINE and Prosiebensat

0.33

Correlation Coefficient

CODERE ONLINE  Prosiebensat

Weak diversification

The 3 months correlation between CODERE and Prosiebensat is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX 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 CODERE ONLINE 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 CODERE ONLINE LUX 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 CODERE ONLINE i.e., CODERE ONLINE and Prosiebensat go up and down completely randomly.

Pair Corralation between CODERE ONLINE and Prosiebensat

Assuming the 90 days horizon CODERE ONLINE is expected to generate 29.87 times less return on investment than Prosiebensat. In addition to that, CODERE ONLINE is 1.06 times more volatile than Prosiebensat 1 Media. It trades about 0.01 of its total potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.16 per unit of volatility. If you would invest  504.00  in Prosiebensat 1 Media on December 25, 2024 and sell it today you would earn a total of  140.00  from holding Prosiebensat 1 Media or generate 27.78% return on investment over 90 days.

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

CODERE ONLINE LUX  vs.  Prosiebensat 1 Media

CODERE ONLINE LUX

Risk-Adjusted Performance

Very Weak

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

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 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Prosiebensat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CODERE ONLINE and Prosiebensat

The main advantage of trading using opposite CODERE ONLINE and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CODERE ONLINE 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 CODERE ONLINE LUX 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 Stocks Directory module to find actively traded stocks across global markets.