Correlation Between CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/

Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/ 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 CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4, you can compare the effects of market volatilities on CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/ 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 CNVISION MEDIA with a short position of PROSIEBENSAT1 MEDIADR4/. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/.

Diversification Opportunities for CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/

0.22

Correlation Coefficient

CNVISION MEDIA  PROSIEBENSAT1 MEDIADR4/

Modest diversification

The 3 months correlation between CNVISION and PROSIEBENSAT1 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ and CNVISION MEDIA 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 CNVISION MEDIA are associated (or correlated) with PROSIEBENSAT1 MEDIADR4/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSIEBENSAT1 MEDIADR4/ has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.51 times more return on investment than PROSIEBENSAT1 MEDIADR4/. However, CNVISION MEDIA is 1.51 times more volatile than PROSIEBENSAT1 MEDIADR4. It trades about 0.15 of its potential returns per unit of risk. PROSIEBENSAT1 MEDIADR4 is currently generating about -0.02 per unit of risk. If you would invest  4.00  in CNVISION MEDIA on September 20, 2024 and sell it today you would earn a total of  1.55  from holding CNVISION MEDIA or generate 38.75% return on investment over 90 days.

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

CNVISION MEDIA  vs.  PROSIEBENSAT1 MEDIADR4

CNVISION MEDIA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CNVISION MEDIA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CNVISION MEDIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

PROSIEBENSAT1 MEDIADR4/

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PROSIEBENSAT1 MEDIADR4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, PROSIEBENSAT1 MEDIADR4/ is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/

The main advantage of trading using opposite CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA position performs unexpectedly, PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ will offset losses from the drop in PROSIEBENSAT1 MEDIADR4/'s long position.

The idea behind CNVISION MEDIA and PROSIEBENSAT1 MEDIADR4 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..