Correlation Between Loop Media and RTL Group
Can any of the company-specific risk be diversified away by investing in both Loop Media 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 Loop Media and RTL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Media and RTL Group SA, you can compare the effects of market volatilities on Loop Media 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 Loop Media with a short position of RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Media and RTL Group.
Diversification Opportunities for Loop Media and RTL Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loop and RTL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Loop Media 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 Loop Media 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 Loop Media 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 Loop Media i.e., Loop Media and RTL Group go up and down completely randomly.
Pair Corralation between Loop Media and RTL Group
Given the investment horizon of 90 days Loop Media is expected to under-perform the RTL Group. In addition to that, Loop Media is 1.44 times more volatile than RTL Group SA. It trades about -0.07 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 Together |
| Strength | Significant |
| Accuracy | 85.18% |
| Values | Daily Returns |
Loop Media vs. RTL Group SA
Performance |
| Timeline |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RTL Group SA |
Loop Media and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Media and RTL Group
The main advantage of trading using opposite Loop Media and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Media 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.| Loop Media vs. Chemours Co | Loop Media vs. Olympic Steel | Loop Media vs. Sonida Senior Living | Loop Media vs. Eldorado Gold Corp |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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