Correlation Between Lundin Energy and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Lundin Energy 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 Lundin Energy and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and RCS MediaGroup SpA, you can compare the effects of market volatilities on Lundin Energy 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 Lundin Energy with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and RCS MediaGroup.
Diversification Opportunities for Lundin Energy and RCS MediaGroup
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and RCS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB 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 Lundin Energy 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 Lundin Energy AB 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 Lundin Energy i.e., Lundin Energy and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Lundin Energy and RCS MediaGroup
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the RCS MediaGroup. In addition to that, Lundin Energy is 2.08 times more volatile than RCS MediaGroup SpA. It trades about -0.03 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.06 per unit of volatility. If you would invest 77.00 in RCS MediaGroup SpA on August 28, 2024 and sell it today you would earn a total of 9.00 from holding RCS MediaGroup SpA or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Lundin Energy AB |
| RCS MediaGroup SpA |
Lundin Energy and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and RCS MediaGroup
The main advantage of trading using opposite Lundin Energy and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy 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.| Lundin Energy vs. SIDETRADE EO 1 | Lundin Energy vs. Vastned Retail NV | Lundin Energy vs. Salesforce | Lundin Energy vs. Big 5 Sporting |
| RCS MediaGroup vs. Siamgas And Petrochemicals | RCS MediaGroup vs. Lion One Metals | RCS MediaGroup vs. SIMS METAL MGT | RCS MediaGroup vs. CHEMICAL INDUSTRIES |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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