Correlation Between ProSiebenSat1 Media and Avanos Medical

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

By analyzing existing cross correlation between ProSiebenSat1 Media SE and Avanos Medical, you can compare the effects of market volatilities on ProSiebenSat1 Media and Avanos Medical 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 Avanos Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProSiebenSat1 Media and Avanos Medical.

Diversification Opportunities for ProSiebenSat1 Media and Avanos Medical

0.0

Correlation Coefficient

ProSiebenSat1 Media  Avanos Medical

Pay attention - limited upside

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

Pair Corralation between ProSiebenSat1 Media and Avanos Medical

If you would invest  0.00  in ProSiebenSat1 Media SE on October 8, 2024 and sell it today you would earn a total of  0.00  from holding ProSiebenSat1 Media SE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

ProSiebenSat1 Media SE  vs.  Avanos Medical

ProSiebenSat1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProSiebenSat1 Media SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ProSiebenSat1 Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Avanos Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avanos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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 ProSiebenSat1 Media and Avanos Medical

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

The idea behind ProSiebenSat1 Media SE and Avanos Medical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.