Correlation Between RCS MediaGroup and LOral SA
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and LOral SA 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 LOral SA 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 LOral SA, you can compare the effects of market volatilities on RCS MediaGroup and LOral SA 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 LOral SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and LOral SA.
Diversification Opportunities for RCS MediaGroup and LOral SA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCS and LOral is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and LOral SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOral SA 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 LOral SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOral SA has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and LOral SA go up and down completely randomly.
Pair Corralation between RCS MediaGroup and LOral SA
Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 1.83 times more return on investment than LOral SA. However, RCS MediaGroup is 1.83 times more volatile than LOral SA. It trades about 0.09 of its potential returns per unit of risk. LOral SA is currently generating about 0.09 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. LOral SA
Performance |
| Timeline |
| RCS MediaGroup SpA |
| LOral SA |
RCS MediaGroup and LOral SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and LOral SA
The main advantage of trading using opposite RCS MediaGroup and LOral SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, LOral SA 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 LOral SA will offset losses from the drop in LOral SA's 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 |
| LOral SA vs. AGNC INVESTMENT | LOral SA vs. GameStop Corp | LOral SA vs. Games Workshop Group | LOral SA vs. SLR Investment Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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