Correlation Between Aberdeen Diversified and Prosiebensat

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

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

Diversification Opportunities for Aberdeen Diversified and Prosiebensat

0.27

Correlation Coefficient

Aberdeen Diversified  Prosiebensat

Modest diversification

The 3 months correlation between Aberdeen and Prosiebensat is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income 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 Aberdeen Diversified 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 Aberdeen Diversified Income 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 Aberdeen Diversified i.e., Aberdeen Diversified and Prosiebensat go up and down completely randomly.

Pair Corralation between Aberdeen Diversified and Prosiebensat

Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 1.05 times more return on investment than Prosiebensat. However, Aberdeen Diversified is 1.05 times more volatile than Prosiebensat 1 Media. It trades about 0.0 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.15 per unit of risk. If you would invest  4,305  in Aberdeen Diversified Income on September 4, 2024 and sell it today you would lose (35.00) from holding Aberdeen Diversified Income or give up 0.81% of portfolio value over 90 days.

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

Aberdeen Diversified Income  vs.  Prosiebensat 1 Media

Aberdeen Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Diversified Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aberdeen Diversified is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 uncertain performance in the last few months, the Stock's basic 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 Aberdeen Diversified and Prosiebensat

The main advantage of trading using opposite Aberdeen Diversified and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified 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 Aberdeen Diversified Income 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.