Correlation Between Air Products and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Air Products 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 Air Products and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and RCS MediaGroup SpA, you can compare the effects of market volatilities on Air Products 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 Air Products with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and RCS MediaGroup.
Diversification Opportunities for Air Products and RCS MediaGroup
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and RCS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and 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 Air Products 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 Air Products and 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 Air Products i.e., Air Products and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Air Products and RCS MediaGroup
Considering the 90-day investment horizon Air Products and is expected to generate 1.2 times more return on investment than RCS MediaGroup. However, Air Products is 1.2 times more volatile than RCS MediaGroup SpA. It trades about 0.21 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.14 per unit of risk. If you would invest 27,355 in Air Products and on September 3, 2024 and sell it today you would earn a total of 6,078 from holding Air Products and or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Air Products |
| RCS MediaGroup SpA |
Air Products and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and RCS MediaGroup
The main advantage of trading using opposite Air Products and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products 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.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| RCS MediaGroup vs. Legible | RCS MediaGroup vs. Sylvania Platinum Limited | RCS MediaGroup vs. Thunderbird Entertainment Group | RCS MediaGroup vs. PAX Global Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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