Correlation Between RCS MediaGroup and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and PARKEN Sport 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 RCS MediaGroup and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCS MediaGroup SpA and PARKEN Sport Entertainment, you can compare the effects of market volatilities on RCS MediaGroup and PARKEN Sport 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 RCS MediaGroup with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and PARKEN Sport.
Diversification Opportunities for RCS MediaGroup and PARKEN Sport
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCS and PARKEN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and RCS MediaGroup 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 RCS MediaGroup SpA are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and PARKEN Sport go up and down completely randomly.
Pair Corralation between RCS MediaGroup and PARKEN Sport
Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 0.81 times more return on investment than PARKEN Sport. However, RCS MediaGroup SpA is 1.24 times less risky than PARKEN Sport. It trades about 0.11 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.08 per unit of risk. If you would invest 71.00 in RCS MediaGroup SpA on November 3, 2024 and sell it today you would earn a total of 17.00 from holding RCS MediaGroup SpA or generate 23.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| RCS MediaGroup SpA |
| PARKEN Sport Enterta |
RCS MediaGroup and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and PARKEN Sport
The main advantage of trading using opposite RCS MediaGroup and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| RCS MediaGroup vs. GBS Software AG | RCS MediaGroup vs. TELECOM ITALIA | RCS MediaGroup vs. USU Software AG | RCS MediaGroup vs. VITEC SOFTWARE GROUP |
| PARKEN Sport vs. United Utilities Group | PARKEN Sport vs. Minerals Technologies | PARKEN Sport vs. Kingdee International Software | PARKEN Sport vs. BioNTech SE |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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