Correlation Between RTL Group and TEGNA
Can any of the company-specific risk be diversified away by investing in both RTL Group and TEGNA 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 TEGNA 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 TEGNA Inc, you can compare the effects of market volatilities on RTL Group and TEGNA 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 TEGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and TEGNA.
Diversification Opportunities for RTL Group and TEGNA
Pay attention - limited upside
The 3 months correlation between RTL and TEGNA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and TEGNA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEGNA Inc 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 TEGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEGNA Inc has no effect on the direction of RTL Group i.e., RTL Group and TEGNA go up and down completely randomly.
Pair Corralation between RTL Group and TEGNA
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the TEGNA. But the stock apears to be less risky and, when comparing its historical volatility, RTL Group SA is 1.37 times less risky than TEGNA. The stock trades about -0.04 of its potential returns per unit of risk. The TEGNA Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,689 in TEGNA Inc on October 20, 2024 and sell it today you would earn a total of 61.00 from holding TEGNA Inc or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTL Group SA vs. TEGNA Inc
Performance |
| Timeline |
| RTL Group SA |
| TEGNA Inc |
RTL Group and TEGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and TEGNA
The main advantage of trading using opposite RTL Group and TEGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, TEGNA 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 TEGNA will offset losses from the drop in TEGNA's long position.| RTL Group vs. VIVENDI UNSPONARD EO | RTL Group vs. News Corporation | RTL Group vs. News Corporation | RTL Group vs. Nexstar Media Group |
| TEGNA vs. VIVENDI UNSPONARD EO | TEGNA vs. News Corporation | TEGNA vs. News Corporation | TEGNA vs. RTL Group SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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