Correlation Between Prosiebensat and PG E

Can any of the company-specific risk be diversified away by investing in both Prosiebensat and PG E 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 PG E 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 PG E P6, you can compare the effects of market volatilities on Prosiebensat and PG E 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 PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and PG E.

Diversification Opportunities for Prosiebensat and PG E

-0.75

Correlation Coefficient

Prosiebensat  PG E

Pay attention - limited upside

The 3 months correlation between Prosiebensat and PCG6 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of Prosiebensat i.e., Prosiebensat and PG E go up and down completely randomly.

Pair Corralation between Prosiebensat and PG E

Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the PG E. In addition to that, Prosiebensat is 1.75 times more volatile than PG E P6. It trades about -0.03 of its total potential returns per unit of risk. PG E P6 is currently generating about 0.05 per unit of volatility. If you would invest  1,603  in PG E P6 on October 4, 2024 and sell it today you would earn a total of  537.00  from holding PG E P6 or generate 33.5% return on investment over 90 days.

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

Prosiebensat 1 Media  vs.  PG E P6

Prosiebensat 1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosiebensat 1 Media 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 primary 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.

PG E P6

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PG E P6 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, PG E is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Prosiebensat and PG E

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

The idea behind Prosiebensat 1 Media and PG E P6 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.