Correlation Between Mediaco Holding and RTL Group
Can any of the company-specific risk be diversified away by investing in both Mediaco Holding 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 Mediaco Holding and RTL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mediaco Holding and RTL Group SA, you can compare the effects of market volatilities on Mediaco Holding 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 Mediaco Holding with a short position of RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediaco Holding and RTL Group.
Diversification Opportunities for Mediaco Holding and RTL Group
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mediaco and RTL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding i.e., Mediaco Holding and RTL Group go up and down completely randomly.
Pair Corralation between Mediaco Holding and RTL Group
Given the investment horizon of 90 days Mediaco Holding is expected to under-perform the RTL Group. In addition to that, Mediaco Holding is 10.15 times more volatile than RTL Group SA. It trades about -0.05 of its total potential returns per unit of risk. RTL Group SA is currently generating about 0.33 per unit of volatility. If you would invest 318.00 in RTL Group SA on October 23, 2024 and sell it today you would earn a total of 8.00 from holding RTL Group SA or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mediaco Holding vs. RTL Group SA
Performance |
| Timeline |
| Mediaco Holding |
| RTL Group SA |
Mediaco Holding and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mediaco Holding and RTL Group
The main advantage of trading using opposite Mediaco Holding and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediaco Holding 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.| Mediaco Holding vs. Saga Communications | Mediaco Holding vs. ProSiebenSat1 Media AG | Mediaco Holding vs. Cumulus Media Class | Mediaco Holding vs. Beasley Broadcast Group |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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