Correlation Between ProSiebenSat1 Media and E W

Can any of the company-specific risk be diversified away by investing in both ProSiebenSat1 Media and E W 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 E W 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 E W Scripps, you can compare the effects of market volatilities on ProSiebenSat1 Media and E W 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 E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and E W.

Diversification Opportunities for ProSiebenSat1 Media and E W

0.53

Correlation Coefficient

ProSiebenSat1 Media  E W

Very weak diversification

The 3 months correlation between ProSiebenSat1 and SSP is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProSiebenSat1 Media AG and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps 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 E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of ProSiebenSat1 Media i.e., ProSiebenSat1 Media and E W go up and down completely randomly.

Pair Corralation between ProSiebenSat1 Media and E W

Assuming the 90 days horizon ProSiebenSat1 Media AG is expected to under-perform the E W. But the pink sheet apears to be less risky and, when comparing its historical volatility, ProSiebenSat1 Media AG is 2.6 times less risky than E W. The pink sheet trades about -0.12 of its potential returns per unit of risk. The E W Scripps is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  183.00  in E W Scripps on September 4, 2024 and sell it today you would earn a total of  30.00  from holding E W Scripps or generate 16.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ProSiebenSat1 Media AG  vs.  E W Scripps

ProSiebenSat1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProSiebenSat1 Media AG 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

E W Scripps

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in E W Scripps are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, E W reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProSiebenSat1 Media and E W

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

The idea behind ProSiebenSat1 Media AG and E W Scripps 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 Global Correlations module to find global opportunities by holding instruments from different markets.