Correlation Between RTL Group and Aferian Plc
Can any of the company-specific risk be diversified away by investing in both RTL Group and Aferian Plc 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 RTL Group and Aferian Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and Aferian Plc, you can compare the effects of market volatilities on RTL Group and Aferian Plc 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 RTL Group with a short position of Aferian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and Aferian Plc.
Diversification Opportunities for RTL Group and Aferian Plc
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RTL and Aferian is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and Aferian Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aferian Plc and RTL Group 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 RTL Group SA are associated (or correlated) with Aferian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aferian Plc has no effect on the direction of RTL Group i.e., RTL Group and Aferian Plc go up and down completely randomly.
Pair Corralation between RTL Group and Aferian Plc
Assuming the 90 days horizon RTL Group SA is expected to generate 1.06 times more return on investment than Aferian Plc. However, RTL Group is 1.06 times more volatile than Aferian Plc. It trades about 0.02 of its potential returns per unit of risk. Aferian Plc is currently generating about -0.1 per unit of risk. If you would invest 349.00 in RTL Group SA on November 2, 2024 and sell it today you would lose (13.00) from holding RTL Group SA or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.26% |
| Values | Daily Returns |
RTL Group SA vs. Aferian Plc
Performance |
| Timeline |
| RTL Group SA |
| Aferian Plc |
RTL Group and Aferian Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and Aferian Plc
The main advantage of trading using opposite RTL Group and Aferian Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, Aferian Plc 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 Aferian Plc will offset losses from the drop in Aferian Plc's long position.| RTL Group vs. ITV plc | RTL Group vs. ITV PLC ADR | RTL Group vs. iHeartMedia | RTL Group vs. ProSiebenSat1 Media AG |
| Aferian Plc vs. ProSiebenSat1 Media AG | Aferian Plc vs. RTL Group SA | Aferian Plc vs. iHeartMedia | Aferian Plc vs. ITV PLC ADR |
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.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |