Correlation Between Pensionbee Group and Prosiebensat

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

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

Diversification Opportunities for Pensionbee Group and Prosiebensat

0.86

Correlation Coefficient

Pensionbee Group  Prosiebensat

Very poor diversification

The 3 months correlation between Pensionbee and Prosiebensat is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pensionbee Group PLC 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 Pensionbee 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 Pensionbee Group PLC 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 Pensionbee Group i.e., Pensionbee Group and Prosiebensat go up and down completely randomly.

Pair Corralation between Pensionbee Group and Prosiebensat

Assuming the 90 days trading horizon Pensionbee Group PLC is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, Pensionbee Group PLC is 1.49 times less risky than Prosiebensat. The stock trades about -0.06 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  531.00  in Prosiebensat 1 Media on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Prosiebensat 1 Media or generate 4.71% return on investment over 90 days.

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

Pensionbee Group PLC  vs.  Prosiebensat 1 Media

Pensionbee Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pensionbee Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Prosiebensat 1 Media

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prosiebensat 1 Media are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Prosiebensat may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pensionbee Group and Prosiebensat

The main advantage of trading using opposite Pensionbee Group and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pensionbee 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 Pensionbee Group PLC 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 Transaction History module to view history of all your transactions and understand their impact on performance.