Correlation Between FLOW TRADERS and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and RCS MediaGroup SpA, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and RCS MediaGroup.
Diversification Opportunities for FLOW TRADERS and RCS MediaGroup
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FLOW and RCS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and RCS MediaGroup go up and down completely randomly.
Pair Corralation between FLOW TRADERS and RCS MediaGroup
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.08 times more return on investment than RCS MediaGroup. However, FLOW TRADERS is 1.08 times more volatile than RCS MediaGroup SpA. It trades about 0.08 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.07 per unit of risk. If you would invest 1,612 in FLOW TRADERS LTD on November 3, 2024 and sell it today you would earn a total of 720.00 from holding FLOW TRADERS LTD or generate 44.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. RCS MediaGroup SpA
Performance |
| Timeline |
| FLOW TRADERS LTD |
| RCS MediaGroup SpA |
FLOW TRADERS and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and RCS MediaGroup
The main advantage of trading using opposite FLOW TRADERS and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. The Goldman Sachs |
| RCS MediaGroup vs. GBS Software AG | RCS MediaGroup vs. TELECOM ITALIA | RCS MediaGroup vs. USU Software AG | RCS MediaGroup vs. VITEC SOFTWARE GROUP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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