Correlation Between RTL Group and E W
Can any of the company-specific risk be diversified away by investing in both RTL Group and E W 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 E W 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 E W Scripps, you can compare the effects of market volatilities on RTL Group and E W 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 E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and E W.
Diversification Opportunities for RTL Group and E W
Very good diversification
The 3 months correlation between RTL and SSP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps 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 E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of RTL Group i.e., RTL Group and E W go up and down completely randomly.
Pair Corralation between RTL Group and E W
Assuming the 90 days horizon RTL Group SA is expected to generate 0.21 times more return on investment than E W. However, RTL Group SA is 4.82 times less risky than E W. It trades about -0.27 of its potential returns per unit of risk. E W Scripps is currently generating about -0.07 per unit of risk. If you would invest 325.00 in RTL Group SA on August 27, 2024 and sell it today you would lose (36.00) from holding RTL Group SA or give up 11.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTL Group SA vs. E W Scripps
Performance |
| Timeline |
| RTL Group SA |
| E W Scripps |
RTL Group and E W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and E W
The main advantage of trading using opposite RTL Group and E W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, E W 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 E W will offset losses from the drop in E W'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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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