Correlation Between Monument Mining and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Monument Mining 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 Monument Mining and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and RCS MediaGroup SpA, you can compare the effects of market volatilities on Monument Mining 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 Monument Mining with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and RCS MediaGroup.
Diversification Opportunities for Monument Mining and RCS MediaGroup
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monument and RCS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited 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 Monument Mining 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Monument Mining and RCS MediaGroup
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 3.23 times more return on investment than RCS MediaGroup. However, Monument Mining is 3.23 times more volatile than RCS MediaGroup SpA. It trades about 0.09 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.08 per unit of risk. If you would invest 8.80 in Monument Mining Limited on November 8, 2024 and sell it today you would earn a total of 15.20 from holding Monument Mining Limited or generate 172.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Monument Mining |
| RCS MediaGroup SpA |
Monument Mining and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and RCS MediaGroup
The main advantage of trading using opposite Monument Mining and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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.| Monument Mining vs. SOLSTAD OFFSHORE NK | Monument Mining vs. Live Nation Entertainment | Monument Mining vs. SIEM OFFSHORE NEW | Monument Mining vs. CSSC Offshore Marine |
| RCS MediaGroup vs. COVIVIO HOTELS INH | RCS MediaGroup vs. VELA TECHNOLPLC LS 0001 | RCS MediaGroup vs. THORNEY TECHS LTD | RCS MediaGroup vs. PPHE HOTEL GROUP |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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