Correlation Between Prosiebensat and Meiko Electronics

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

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

Diversification Opportunities for Prosiebensat and Meiko Electronics

-0.85

Correlation Coefficient

Prosiebensat  Meiko Electronics

Pay attention - limited upside

The 3 months correlation between Prosiebensat and Meiko is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Prosiebensat 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 Prosiebensat 1 Media are associated (or correlated) with Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of Prosiebensat i.e., Prosiebensat and Meiko Electronics go up and down completely randomly.

Pair Corralation between Prosiebensat and Meiko Electronics

Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 1.03 times more return on investment than Meiko Electronics. However, Prosiebensat is 1.03 times more volatile than Meiko Electronics Co. It trades about 0.16 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.13 per unit of risk. If you would invest  504.00  in Prosiebensat 1 Media on December 25, 2024 and sell it today you would earn a total of  140.00  from holding Prosiebensat 1 Media or generate 27.78% return on investment over 90 days.

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

Prosiebensat 1 Media  vs.  Meiko Electronics Co

Prosiebensat 1 Media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prosiebensat 1 Media are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Prosiebensat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Meiko Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiko Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Prosiebensat and Meiko Electronics

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

The idea behind Prosiebensat 1 Media and Meiko Electronics Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..