Correlation Between PROSIEBENSAT1 MEDIADR4/ and Haier Smart

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Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and Haier Smart 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 MEDIADR4/ and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and Haier Smart Home, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and Haier Smart 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 MEDIADR4/ with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and Haier Smart.

Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and Haier Smart

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between PROSIEBENSAT1 and Haier is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and PROSIEBENSAT1 MEDIADR4/ 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 MEDIADR4 are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and Haier Smart go up and down completely randomly.

Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and Haier Smart

Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to under-perform the Haier Smart. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.63 times more volatile than Haier Smart Home. It trades about -0.09 of its total potential returns per unit of risk. Haier Smart Home is currently generating about 0.01 per unit of volatility. If you would invest  179.00  in Haier Smart Home on October 11, 2024 and sell it today you would earn a total of  1.00  from holding Haier Smart Home or generate 0.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

PROSIEBENSAT1 MEDIADR4  vs.  Haier Smart Home

 Performance 
       Timeline  
PROSIEBENSAT1 MEDIADR4/ 

Risk-Adjusted Performance

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Weak
 
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Very Weak
Over the last 90 days PROSIEBENSAT1 MEDIADR4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Haier Smart Home 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Haier Smart Home are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Haier Smart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PROSIEBENSAT1 MEDIADR4/ and Haier Smart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PROSIEBENSAT1 MEDIADR4/ and Haier Smart

The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.
The idea behind PROSIEBENSAT1 MEDIADR4 and Haier Smart Home 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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