Correlation Between Prosiebensat and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Prosiebensat and Townsquare 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 Prosiebensat and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosiebensat 1 Media and Townsquare Media, you can compare the effects of market volatilities on Prosiebensat and Townsquare 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 Prosiebensat with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Townsquare Media.
Diversification Opportunities for Prosiebensat and Townsquare Media
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosiebensat and Townsquare is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Prosiebensat 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 Prosiebensat 1 Media are associated (or correlated) with Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Prosiebensat i.e., Prosiebensat and Townsquare Media go up and down completely randomly.
Pair Corralation between Prosiebensat and Townsquare Media
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 0.91 times more return on investment than Townsquare Media. However, Prosiebensat 1 Media is 1.09 times less risky than Townsquare Media. It trades about 0.12 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.06 per unit of risk. If you would invest 600.00 in Prosiebensat 1 Media on April 24, 2025 and sell it today you would earn a total of 121.00 from holding Prosiebensat 1 Media or generate 20.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Prosiebensat 1 Media vs. Townsquare Media
Performance |
Timeline |
Prosiebensat 1 Media |
Townsquare Media |
Prosiebensat and Townsquare Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prosiebensat and Townsquare Media
The main advantage of trading using opposite Prosiebensat and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat position performs unexpectedly, Townsquare 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.Prosiebensat vs. Tianjin Capital Environmental | Prosiebensat vs. TOMBADOR IRON LTD | Prosiebensat vs. Grand Canyon Education | Prosiebensat vs. Laureate Education |
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Check out your portfolio center.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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