Correlation Between ProSiebenSat1 Media and Loop Media

Can any of the company-specific risk be diversified away by investing in both ProSiebenSat1 Media and Loop Media 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 ProSiebenSat1 Media and Loop Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProSiebenSat1 Media AG and Loop Media, you can compare the effects of market volatilities on ProSiebenSat1 Media and Loop Media 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 ProSiebenSat1 Media with a short position of Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and Loop Media.

Diversification Opportunities for ProSiebenSat1 Media and Loop Media

0.0

Correlation Coefficient

ProSiebenSat1 Media  Loop Media

Pay attention - limited upside

The 3 months correlation between ProSiebenSat1 and Loop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProSiebenSat1 Media AG and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media and ProSiebenSat1 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 ProSiebenSat1 Media AG are associated (or correlated) with Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of ProSiebenSat1 Media i.e., ProSiebenSat1 Media and Loop Media go up and down completely randomly.

Pair Corralation between ProSiebenSat1 Media and Loop Media

If you would invest  120.00  in ProSiebenSat1 Media AG on December 2, 2024 and sell it today you would earn a total of  32.00  from holding ProSiebenSat1 Media AG or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProSiebenSat1 Media AG  vs.  Loop Media

ProSiebenSat1 Media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProSiebenSat1 Media AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, ProSiebenSat1 Media showed solid returns over the last few months and may actually be approaching a breakup point.

Loop Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Loop Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Loop Media is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ProSiebenSat1 Media and Loop Media

The main advantage of trading using opposite ProSiebenSat1 Media and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProSiebenSat1 Media position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media's long position.

The idea behind ProSiebenSat1 Media AG and Loop 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.