Correlation Between Transportadora and Prosiebensat

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

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

Diversification Opportunities for Transportadora and Prosiebensat

-0.79

Correlation Coefficient

Transportadora  Prosiebensat

Pay attention - limited upside

The 3 months correlation between Transportadora and Prosiebensat is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and Transportadora 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 Transportadora de Gas are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Transportadora i.e., Transportadora and Prosiebensat go up and down completely randomly.

Pair Corralation between Transportadora and Prosiebensat

Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 1.71 times more return on investment than Prosiebensat. However, Transportadora is 1.71 times more volatile than Prosiebensat 1 Media. It trades about 0.12 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.08 per unit of risk. If you would invest  1,620  in Transportadora de Gas on September 29, 2024 and sell it today you would earn a total of  1,120  from holding Transportadora de Gas or generate 69.14% return on investment over 90 days.

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

Transportadora de Gas  vs.  Prosiebensat 1 Media

Transportadora de Gas

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, Transportadora reported solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Transportadora and Prosiebensat

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

The idea behind Transportadora de Gas and Prosiebensat 1 Media 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.