Correlation Between SPDR Barclays and PROSIEBENSAT1 MEDIADR4

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

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

Diversification Opportunities for SPDR Barclays and PROSIEBENSAT1 MEDIADR4

-0.41

Correlation Coefficient

SPDR Barclays  PROSIEBENSAT1 MEDIADR4

Very good diversification

The 3 months correlation between SPDR and PROSIEBENSAT1 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4 and SPDR Barclays 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 SPDR Barclays Long 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 SPDR Barclays i.e., SPDR Barclays and PROSIEBENSAT1 MEDIADR4 go up and down completely randomly.

Pair Corralation between SPDR Barclays and PROSIEBENSAT1 MEDIADR4

Given the investment horizon of 90 days SPDR Barclays Long is expected to under-perform the PROSIEBENSAT1 MEDIADR4. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Barclays Long is 3.59 times less risky than PROSIEBENSAT1 MEDIADR4. The etf trades about -0.01 of its potential returns per unit of risk. The PROSIEBENSAT1 MEDIADR4 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  207.00  in PROSIEBENSAT1 MEDIADR4 on February 24, 2025 and sell it today you would lose (34.00) from holding PROSIEBENSAT1 MEDIADR4 or give up 16.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.8%
Values	Daily Returns

SPDR Barclays Long  vs.  PROSIEBENSAT1 MEDIADR4

SPDR Barclays Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Barclays Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SPDR Barclays is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

PROSIEBENSAT1 MEDIADR4

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PROSIEBENSAT1 MEDIADR4 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, PROSIEBENSAT1 MEDIADR4 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR Barclays and PROSIEBENSAT1 MEDIADR4

The main advantage of trading using opposite SPDR Barclays and PROSIEBENSAT1 MEDIADR4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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 SPDR Barclays Long 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 Transaction History module to view history of all your transactions and understand their impact on performance.