Correlation Between CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/

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

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

Diversification Opportunities for CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/

0.45

Correlation Coefficient

CHINA EDUCATION  PROSIEBENSAT1 MEDIADR4/

Very weak diversification

The 3 months correlation between CHINA and PROSIEBENSAT1 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.

Pair Corralation between CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/

Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the PROSIEBENSAT1 MEDIADR4/. In addition to that, CHINA EDUCATION is 1.32 times more volatile than PROSIEBENSAT1 MEDIADR4. It trades about -0.04 of its total potential returns per unit of risk. PROSIEBENSAT1 MEDIADR4 is currently generating about 0.09 per unit of volatility. If you would invest  131.00  in PROSIEBENSAT1 MEDIADR4 on March 9, 2025 and sell it today you would earn a total of  40.00  from holding PROSIEBENSAT1 MEDIADR4 or generate 30.53% return on investment over 90 days.

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

CHINA EDUCATION GROUP  vs.  PROSIEBENSAT1 MEDIADR4

CHINA EDUCATION GROUP

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA EDUCATION GROUP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CHINA EDUCATION may actually be approaching a critical reversion point that can send shares even higher in July 2025.

PROSIEBENSAT1 MEDIADR4/

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PROSIEBENSAT1 MEDIADR4 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, PROSIEBENSAT1 MEDIADR4/ reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/

The main advantage of trading using opposite CHINA EDUCATION and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.