Correlation Between RCS MediaGroup and Power Assets
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Power Assets 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 Power Assets 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 Power Assets Holdings, you can compare the effects of market volatilities on RCS MediaGroup and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Power Assets.
Diversification Opportunities for RCS MediaGroup and Power Assets
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RCS and Power is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Power Assets go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Power Assets
Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 2.31 times more return on investment than Power Assets. However, RCS MediaGroup is 2.31 times more volatile than Power Assets Holdings. It trades about 0.09 of its potential returns per unit of risk. Power Assets Holdings is currently generating about -0.15 per unit of risk. If you would invest 84.00 in RCS MediaGroup SpA on October 25, 2024 and sell it today you would earn a total of 3.00 from holding RCS MediaGroup SpA or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Power Assets Holdings
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Power Assets Holdings |
RCS MediaGroup and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Power Assets
The main advantage of trading using opposite RCS MediaGroup and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| RCS MediaGroup vs. Marie Brizard Wine | RCS MediaGroup vs. SOCKET MOBILE NEW | RCS MediaGroup vs. ITALIAN WINE BRANDS | RCS MediaGroup vs. Singapore Telecommunications Limited |
| Power Assets vs. PennantPark Investment | Power Assets vs. ULTRA CLEAN HLDGS | Power Assets vs. HK Electric Investments | Power Assets vs. PLANT VEDA FOODS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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