Correlation Between One Media and Prosiebensat

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

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

Diversification Opportunities for One Media and Prosiebensat

0.29

Correlation Coefficient

One Media  Prosiebensat

Modest diversification

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

Pair Corralation between One Media and Prosiebensat

Assuming the 90 days trading horizon One Media iP is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, One Media iP is 1.04 times less risky than Prosiebensat. The stock trades about -0.01 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  611.00  in Prosiebensat 1 Media on October 5, 2024 and sell it today you would lose (93.00) from holding Prosiebensat 1 Media or give up 15.22% of portfolio value over 90 days.

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

One Media iP  vs.  Prosiebensat 1 Media

One Media iP

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, One Media 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with One Media and Prosiebensat

The main advantage of trading using opposite One Media and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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 One Media iP 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.