Correlation Between RTL Group and TV Azteca
Can any of the company-specific risk be diversified away by investing in both RTL Group and TV Azteca 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 TV Azteca 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 TV Azteca SAB, you can compare the effects of market volatilities on RTL Group and TV Azteca 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 TV Azteca. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and TV Azteca.
Diversification Opportunities for RTL Group and TV Azteca
Significant diversification
The 3 months correlation between RTL and AZTEF is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and TV Azteca SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Azteca SAB 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 TV Azteca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Azteca SAB has no effect on the direction of RTL Group i.e., RTL Group and TV Azteca go up and down completely randomly.
Pair Corralation between RTL Group and TV Azteca
Assuming the 90 days horizon RTL Group is expected to generate 27.69 times less return on investment than TV Azteca. But when comparing it to its historical volatility, RTL Group SA is 31.52 times less risky than TV Azteca. It trades about 0.24 of its potential returns per unit of risk. TV Azteca SAB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.00 in TV Azteca SAB on October 20, 2024 and sell it today you would earn a total of 0.03 from holding TV Azteca SAB or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
RTL Group SA vs. TV Azteca SAB
Performance |
| Timeline |
| RTL Group SA |
| TV Azteca SAB |
RTL Group and TV Azteca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and TV Azteca
The main advantage of trading using opposite RTL Group and TV Azteca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, TV Azteca 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 TV Azteca will offset losses from the drop in TV Azteca's long position.| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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