Correlation Between Alstria Office and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Alstria Office and RCS MediaGroup 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 Alstria Office and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and RCS MediaGroup SpA, you can compare the effects of market volatilities on Alstria Office and RCS MediaGroup 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 Alstria Office with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and RCS MediaGroup.
Diversification Opportunities for Alstria Office and RCS MediaGroup
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alstria and RCS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA and Alstria Office 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 alstria office REIT AG are associated (or correlated) with RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Alstria Office i.e., Alstria Office and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Alstria Office and RCS MediaGroup
Assuming the 90 days horizon alstria office REIT AG is expected to under-perform the RCS MediaGroup. In addition to that, Alstria Office is 2.92 times more volatile than RCS MediaGroup SpA. It trades about -0.25 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about -0.04 per unit of volatility. If you would invest 88.00 in RCS MediaGroup SpA on October 17, 2024 and sell it today you would lose (2.00) from holding RCS MediaGroup SpA or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. RCS MediaGroup SpA
Performance |
| Timeline |
| alstria office REIT |
| RCS MediaGroup SpA |
Alstria Office and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and RCS MediaGroup
The main advantage of trading using opposite Alstria Office and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.| Alstria Office vs. PKSHA TECHNOLOGY INC | Alstria Office vs. Minerals Technologies | Alstria Office vs. Playtech plc | Alstria Office vs. Sunny Optical Technology |
| RCS MediaGroup vs. JD SPORTS FASH | RCS MediaGroup vs. alstria office REIT AG | RCS MediaGroup vs. SOEDER SPORTFISKE AB | RCS MediaGroup vs. USWE SPORTS AB |
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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