Correlation Between Fonu2 and ProSiebenSat1 Media

Can any of the company-specific risk be diversified away by investing in both Fonu2 and ProSiebenSat1 Media 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 Fonu2 and ProSiebenSat1 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fonu2 Inc and ProSiebenSat1 Media AG, you can compare the effects of market volatilities on Fonu2 and ProSiebenSat1 Media 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 Fonu2 with a short position of ProSiebenSat1 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonu2 and ProSiebenSat1 Media.

Diversification Opportunities for Fonu2 and ProSiebenSat1 Media

-0.1

Correlation Coefficient

Fonu2  ProSiebenSat1 Media

Good diversification

The 3 months correlation between Fonu2 and ProSiebenSat1 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fonu2 Inc and ProSiebenSat1 Media AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProSiebenSat1 Media and Fonu2 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 Fonu2 Inc are associated (or correlated) with ProSiebenSat1 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProSiebenSat1 Media has no effect on the direction of Fonu2 i.e., Fonu2 and ProSiebenSat1 Media go up and down completely randomly.

Pair Corralation between Fonu2 and ProSiebenSat1 Media

Given the investment horizon of 90 days Fonu2 Inc is expected to generate 59.72 times more return on investment than ProSiebenSat1 Media. However, Fonu2 is 59.72 times more volatile than ProSiebenSat1 Media AG. It trades about 0.16 of its potential returns per unit of risk. ProSiebenSat1 Media AG is currently generating about 0.03 per unit of risk. If you would invest  0.00  in Fonu2 Inc on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Fonu2 Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Fonu2 Inc  vs.  ProSiebenSat1 Media AG

Fonu2 Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fonu2 Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fonu2 unveiled solid returns over the last few months and may actually be approaching a breakup point.

ProSiebenSat1 Media

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProSiebenSat1 Media AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, ProSiebenSat1 Media is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fonu2 and ProSiebenSat1 Media

The main advantage of trading using opposite Fonu2 and ProSiebenSat1 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonu2 position performs unexpectedly, ProSiebenSat1 Media 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 Media will offset losses from the drop in ProSiebenSat1 Media's long position.

The idea behind Fonu2 Inc and ProSiebenSat1 Media AG 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.