Correlation Between Informa PLC and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Informa PLC 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 Informa PLC and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Informa PLC ADR and RCS MediaGroup SpA, you can compare the effects of market volatilities on Informa PLC 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 Informa PLC with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Informa PLC and RCS MediaGroup.
Diversification Opportunities for Informa PLC and RCS MediaGroup
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Informa and RCS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Informa PLC ADR 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 Informa PLC 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 Informa PLC ADR 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 Informa PLC i.e., Informa PLC and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Informa PLC and RCS MediaGroup
Assuming the 90 days horizon Informa PLC ADR is expected to under-perform the RCS MediaGroup. In addition to that, Informa PLC is 4.12 times more volatile than RCS MediaGroup SpA. It trades about -0.05 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.3 per unit of volatility. If you would invest 85.00 in RCS MediaGroup SpA on August 27, 2024 and sell it today you would earn a total of 3.00 from holding RCS MediaGroup SpA or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Informa PLC ADR vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Informa PLC ADR |
| RCS MediaGroup SpA |
Informa PLC and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Informa PLC and RCS MediaGroup
The main advantage of trading using opposite Informa PLC and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Informa PLC 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.| Informa PLC vs. FP Newspapers | Informa PLC vs. Scholastic | Informa PLC vs. Lee Enterprises Incorporated | Informa PLC vs. John Wiley Sons |
| RCS MediaGroup vs. FP Newspapers | RCS MediaGroup vs. Scholastic | RCS MediaGroup vs. Lee Enterprises Incorporated | RCS MediaGroup vs. John Wiley Sons |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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