Correlation Between Network Media and Prothena Plc
Can any of the company-specific risk be diversified away by investing in both Network Media and Prothena Plc 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 Network Media and Prothena Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network Media Group and Prothena plc, you can compare the effects of market volatilities on Network Media and Prothena Plc 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 Network Media with a short position of Prothena Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Prothena Plc.
Diversification Opportunities for Network Media and Prothena Plc
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Network and Prothena is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Prothena plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prothena plc and Network 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 Network Media Group are associated (or correlated) with Prothena Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prothena plc has no effect on the direction of Network Media i.e., Network Media and Prothena Plc go up and down completely randomly.
Pair Corralation between Network Media and Prothena Plc
Assuming the 90 days horizon Network Media Group is expected to under-perform the Prothena Plc. In addition to that, Network Media is 1.07 times more volatile than Prothena plc. It trades about -0.12 of its total potential returns per unit of risk. Prothena plc is currently generating about 0.14 per unit of volatility. If you would invest 834.00 in Prothena plc on September 9, 2025 and sell it today you would earn a total of 239.00 from holding Prothena plc or generate 28.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Network Media Group vs. Prothena plc
Performance |
| Timeline |
| Network Media Group |
| Prothena plc |
Network Media and Prothena Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network Media and Prothena Plc
The main advantage of trading using opposite Network Media and Prothena Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network Media position performs unexpectedly, Prothena Plc 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 Prothena Plc will offset losses from the drop in Prothena Plc's long position.| Network Media vs. HeadsUp Entertainment International | Network Media vs. Big Screen Entertainment | Network Media vs. Farmhouse | Network Media vs. Legible |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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