Correlation Between VIAPLAY GROUP and Prosiebensat

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

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

Diversification Opportunities for VIAPLAY GROUP and Prosiebensat

-0.29

Correlation Coefficient

VIAPLAY GROUP  Prosiebensat

Very good diversification

The 3 months correlation between VIAPLAY and Prosiebensat is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB 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 VIAPLAY GROUP 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 VIAPLAY GROUP AB 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 VIAPLAY GROUP i.e., VIAPLAY GROUP and Prosiebensat go up and down completely randomly.

Pair Corralation between VIAPLAY GROUP and Prosiebensat

Assuming the 90 days horizon VIAPLAY GROUP AB is expected to generate 23.44 times more return on investment than Prosiebensat. However, VIAPLAY GROUP is 23.44 times more volatile than Prosiebensat 1 Media. It trades about 0.17 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about 0.16 per unit of risk. If you would invest  5.57  in VIAPLAY GROUP AB on December 25, 2024 and sell it today you would lose (2.44) from holding VIAPLAY GROUP AB or give up 43.81% of portfolio value over 90 days.

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

VIAPLAY GROUP AB  vs.  Prosiebensat 1 Media

VIAPLAY GROUP AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIAPLAY GROUP AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIAPLAY GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

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 VIAPLAY GROUP and Prosiebensat

The main advantage of trading using opposite VIAPLAY GROUP and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIAPLAY GROUP 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 VIAPLAY GROUP AB 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.