Correlation Between IHeartMedia and RTL Group
Can any of the company-specific risk be diversified away by investing in both IHeartMedia and RTL Group 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 IHeartMedia and RTL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iHeartMedia and RTL Group SA, you can compare the effects of market volatilities on IHeartMedia and RTL Group 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 IHeartMedia with a short position of RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and RTL Group.
Diversification Opportunities for IHeartMedia and RTL Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IHeartMedia and RTL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA and IHeartMedia 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 iHeartMedia are associated (or correlated) with RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of IHeartMedia i.e., IHeartMedia and RTL Group go up and down completely randomly.
Pair Corralation between IHeartMedia and RTL Group
Assuming the 90 days horizon IHeartMedia is expected to generate 3.87 times less return on investment than RTL Group. In addition to that, IHeartMedia is 1.2 times more volatile than RTL Group SA. It trades about 0.0 of its total potential returns per unit of risk. RTL Group SA is currently generating about 0.02 per unit of volatility. If you would invest 407.00 in RTL Group SA on August 24, 2024 and sell it today you would lose (110.00) from holding RTL Group SA or give up 27.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 73.13% |
| Values | Daily Returns |
iHeartMedia vs. RTL Group SA
Performance |
| Timeline |
| iHeartMedia |
| RTL Group SA |
IHeartMedia and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHeartMedia and RTL Group
The main advantage of trading using opposite IHeartMedia and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHeartMedia position performs unexpectedly, RTL Group 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 RTL Group will offset losses from the drop in RTL Group's long position.| IHeartMedia vs. RTL Group SA | IHeartMedia vs. ITV PLC ADR | IHeartMedia vs. RTL Group SA | IHeartMedia vs. ITV plc |
| RTL Group vs. ITV plc | RTL Group vs. ITV PLC ADR | RTL Group vs. iHeartMedia | RTL Group vs. ProSiebenSat1 Media AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |